Schaeffer's Trading Floor Blog

Options Check-Up: Groupon Inc, Amazon.com, Inc., and BlackBerry Ltd

Analyzing recent option activity for GRPN, AMZN, and BBRY

by 3/20/2014 5:40 PM
Stocks quoted in this article:

Among the equities attracting notable attention from options traders of late are daily deals publisher Groupon Inc (NASDAQ:GRPN), online retailing giant Amazon.com, Inc. (NASDAQ:AMZN), and telecom manufacturer BlackBerry Ltd (NASDAQ:BBRY). Below, we'll look at how options buyers are betting on GRPN, AMZN, and BBRY, and how much they are willing to pay to do so.

  • Although still recovering from its late-February earnings-related gap, GRPN has caught the attention of call buyers in recent weeks. At the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), more than three calls have been purchased to open for every put over the last 50 trading days. The resultant call/put volume ratio of 3.25 is elevated on a relative basis, in the 82nd annual percentile. Meanwhile, Groupon Inc's short-term options are notably cheap, from a volatility perspective. The stock's Schaeffer's Volatility Index (SVI) stands at 50%, which is lower than 95% of all other readings from the past 12 months. Today, GRPN was in recovery mode, adding 2.4% to close at $8.40.

  • Call buyers have also sunk their collective teeth into AMZN, even amid the stock's year-to-date loss of 7.5%, which has brought it to $368.97. The stock's 10-day ISE/CBOE/PHLX call/put volume ratio of 1.30 is just 9 percentage points away from a new annual peak. Short interest is notably low -- at 1.6% of the stock's float -- so it is likely the majority of this call buying was on the part of garden-variety bulls. These traders are scooping up Amazon.com Inc. calls at a relative bargain, however; the stock's SVI of 23% is lower than all but 10% of the past year's worth of readings.

  • Finally, BBRY call buying is at annual-high levels, relative to put buying. The stock's 10-day ISE/CBOE/PHLX call/put volume ratio of 7.05 stands above all other comparable readings taken during the last 12 months, as more than seven calls are being purchased to open for every put. This bullish positioning seems warranted, given the stock's year-to-date advance of 26.6% to $9.42. With 22.3% of the equity's available float sold short, though, it's also possible some of this call buying was on the part of short sellers hedging their bets. Options pricing is par for the course, however; BBRY's SVI stands at 68%, in the 51st annual percentile. Options premium could grow pricier in the coming days, as BBRY Ltd prepares to release earnings next Friday morning.

permanent link
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT

Partner Center

© 2014 Schaeffer's Investment Research, Inc. 5151 Pfeiffer Road, Suite 250, Cincinnati, Ohio 45242 Phone: (800) 448-2080 FAX: (513) 589-3810 Int'l Callers: (513) 589-3800 Email: service@sir-inc.com

All Rights Reserved. Unauthorized reproduction of any SIR publication is strictly prohibited.

Market Data provided by QuoteMedia.com | Data delayed 15-20 minutes unless otherwise indicated.