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Option Brief: Calls crossed the tape at almost three times the average daily rate on Activision Blizzard, Inc. (NASDAQ:ATVI) yesterday, and outpaced puts by a margin of nearly 9-to-1. Although the stock has spent the past several sessions below the $17 mark, a number of speculators bet on a move back above this key level by week's end.
The most sought-after position on ATVI Tuesday was the weekly 1/31 17-strike call, where nearly all of the 6,038 contracts that traded did so on the ask side. Implied volatility jumped 11.1 percentage points on the day, and open interest rose overnight, making it safe to assume that new bullish positions were initiated. At last night's close, delta for the call was docked at 0.31, or 31%, suggesting a less than 1-in-3 chance of an in-the-money finish at Friday's close.
Should ATVI fail to take back the $17 level, the most yesterday's call buyers stand to lose is the initial premium paid. According to Trade-Alert, the volume-weighted average price for the weekly 1/31 17-strike calls was $0.10.
As noted, Activision Blizzard, Inc. (NASDAQ:ATVI) has not traded north of $17 since Jan. 21. This critical area for ATVI has served as both support and resistance since last July. Longer-term, though, the stock has added an impressive 46% year-over-year, and right out of today's gate, ATVI added an additional 0.5% to linger near $16.77.