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Put volume has been ramping up lately on Priceline.com Inc (NASDAQ:PCLN), according to data from the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX). During the past 10 days, options traders have bought to open 1.10 puts for every call on PCLN.
This put/call volume ratio ranks above 88% of other such readings taken during the past year, as traders have scooped up bearish bets over bullish at a faster clip only 12% of the time. This ratio has jumped considerably since bottoming at 0.88 in mid-August, revealing a growing trend toward puts over calls on PCLN.
From a broader perspective, the 50-day ISE/CBOE/PHLX put/call volume ratio for PCLN stands at 1.02. This ratio registers in the 90th percentile of its annual range, confirming a generally bearish mood among options players.
In the same skeptical vein, Schaeffer's put/call open interest ratio (SOIR) for Priceline.com Inc (NASDAQ:PCLN) checks in at 1.04, in the 87th annual percentile. Not only do puts outnumber calls among options set to expire within three months, but short-term speculators have been more put-heavy only 13% of the time during the past year.
Some of these put players may be PCLN shareholders in disguise, though. Shares of the travel site have notched an impressive year-to-date gain of 55%, cruising higher along the support of their 10-week and 20-week moving averages. In order to protect some of their paper profits and lock in a favorable exit price, Priceline.com shareholders could be picking up put options on the stock.
Just last month, on the heels of its well-received earnings report, PCLN gapped up to a new all-time peak of $994.98. Since then, the security has found support near the site of its pre-gap highs, and is currently docked at $962.21. The current period of consolidation may be leading up to another move higher by this technical standout.
If Priceline.com does resume its journey toward record-high territory, the remaining shorts could eventually be shaken out of their positions. Following a roughly 12% decline during the past two reporting periods, a healthy 5.2% of the equity's float is still dedicated to short interest. Should these bears begin to feel the heat of a continued uptrend, a rush to cover could propel PCLN even higher.
However, for shareholders who are wary of a potential Priceline.com Inc (NASDAQ:PCLN) free-fall, now is an opportune time to pick up put hedges. The stock's Schaeffer's Volatility Index (SVI) weighs in at 20%, which ranks lower than 96% of other such readings taken over the past year. This low rank reveals that short-term options on PCLN have rarely been cheaper, from a volatility perspective.