Eagle Bulk Shipping Inc.
was bombarded by bullish bettors on Wednesday, with single-session volume skyrocketing to almost 10 times the norm. In total, roughly 15,000 of these optimistically skewed options crossed the tape yesterday, which was more than 13 times the number of EGLE puts that changed hands.
Digging deeper into the data reveals that most of the activity was attributable to back-month bulls. The stock's December 5 call saw about 9,600 contracts exchanged on open interest of fewer than 3,500, suggesting the bulk of the activity translated into new positions. Furthermore, 60% of the contracts traded at the ask price, implying they were likely bought.
As a result of yesterday's surge in volume, the at-the-money December 5 strike now harbors 6,341 open call positions. Nevertheless, the out-of-the-money 7.50 strike remains home to peak call open interest in the December series, with almost 7,000 contracts in residence.
The escalating optimism in the options pits is further echoed by the latest data from the International Securities Exchange (ISE) and Chicago Board Options Exchange (CBOE). During the past 10 trading sessions, traders on the ISE and CBOE have racked up an impressive call/put volume ratio of 218.9 – a new 52-week peak. In other words, during the past couple of weeks, speculators on these exchanges have bought to open almost 219 times more EGLE calls than puts.
In fact, the call-buying boom of late is reflected via the stock's descending Schaeffer's put/call open interest ratio (SOIR), which measures the front three months of options. Just two weeks ago, EGLE's SOIR stood at 0.76, in the skeptically skewed 79th annual percentile. Since then, however, the equity's SOIR has sloped downward at a rapid-fire pace, and now stands at a more neutral 0.60, in the 49th annual percentile.
Simply put, it appears that near-term option traders are flooding EGLE's bullish bandwagon at warp speed.
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