Schaeffer's Trading Floor Blog

Options Check-Up: Herbalife Ltd., Crocs, Inc., and Gogo Inc

Analyzing recent option activity for HLF, CROX, and GOGO

by 5/1/2014 5:13 PM
Stocks quoted in this article:

Among the stocks attracting attention from options traders lately are nutritional supplements provider Herbalife Ltd. (NYSE:HLF), footwear concern Crocs, Inc. (NASDAQ:CROX), and in-flight connectivity issue Gogo Inc (NASDAQ:GOGO). Below, we'll break down how option buyers are positioning themselves, and how much speculators are willing to pay for their bets on HLF, CROX, and GOGO.

  • With HLF down almost 29% from its early January record peak of $83.51 -- a downtrend only exacerbated in today's session, when the stock lost 0.7% to close at $59.59 -- bearish traders have been making their presence known in the stock's options pits. Over the course of the past 10 sessions, the stock has racked up a put/call volume ratio of 1.90 on the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX). What's more, this ratio ranks in the 99th percentile of its annual range, meaning puts have been bought to open over calls with more rapidity just 1% of the time within the past year. For those picking up Herbalife Ltd.'s short-term bets, they can rest easy knowing they're scooping up these options at a relative bargain, per the equity's Schaeffer's Volatility Index (SVI) of 52%, which ranks lower than 77% of similar readings taken in the past year.


  • CROX has seen an uptick in bullish betting in recent months, as evidenced by its 50-day ISE/CBOE/PHLX call/put volume ratio of 5.47, which ranks in the 91st percentile of its annual range. Simply stated, long calls have been initiated over long puts at a near-annual-high clip. Considering Crocs, Inc. stepped into the earnings confessional just last night, premium on the stock's front-month options tends toward the pricey side, from a volatility perspective. Specifically, the equity's SVI of 55% ranks in the 74th percentile of its annual range. In today's session, the stock tacked on 2.8% to land at $15.55, despite a mixed earnings report. Meanwhile, the company is currently looking for a replacement for President and CEO John P. McCarvel, whose retirement went into effect yesterday.


  • Since hitting an all-time high of $35.77 in December, shares of GOGO have surrendered nearly 63% to churn near $13.31. This negative price action has been in full force this week, after the stock gapped lower on news that AT&T Inc. (NYSE:T) and Honeywell International Inc. (NYSE:HON) may be teaming up to throw their hat into the in-flight connectivity ring. For the week, Gogo Inc is on pace to lose 27%. Option players of late have paid no mind to this dreary technical showing, and over the past 20 sessions, speculators at the ISE, CBOE, and PHLX have bought to open 8.20 calls for every put. With GOGO set to reveal its first-quarter earnings ahead of the May 12 open, premium on the stock's front-month options is on the rise. In fact, the equity's SVI has risen to 96% from its week-ago reading of 84%, and now ranks higher than 76% of readings taken since GOGO began trading last June.

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