Schaeffer's Options Center
Sponsored by:
Schaeffer's Daily Option Blog

Bearish Traders Swarm Herbalife Ltd. (HLF) Despite Upbeat Headlines

HLF put options are unusually popular today

by 12/17/2013 11:15 AM
Stocks quoted in this article:

Shares of Herbalife Ltd. (NYSE:HLF) cruised to an all-time high of $78.50 this morning, after the firm received a clean re-audit from PricewaterhouseCoopers LLP. The positive news also seems to have triggered a pair of price-target hikes at Canaccord Genuity and Janney. Nevertheless, option bears have been swarming the stock today, with roughly 19,000 puts exchanged so far -- more than quadruple the intraday norm.

Garnering notable attention is the weekly 12/27 75 strike, which has seen close to 2,300 puts change hands. The bulk of these contracts traded at the ask price, and today's volume has exceeded current open interest levels, signaling the initiation of fresh pessimistic bets. In other words, the speculators will start to profit if HLF retreats below the $75 level between now and the close on Dec. 27, when these weekly options expire.

Today's preference for puts over calls is a deviation from the stock's recent trend. The equity's 10-day International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) call/put volume ratio of 2.46 ranks in the 87th annual percentile, reflecting a greater demand for long calls versus puts lately. However, since short interest accounts for a hefty 28.4% of HLF's available float, it's possible that some of the recent call buying -- particularly at out-of-the-money strikes -- could be attributable to short sellers hedging their pessimistic positions.

Either way, Herbalife Ltd.'s (NYSE:HLF) technical prowess is undeniable, considering the shares have surged around 130% year-to-date to trade at $75.66. On the charts, the vitamin supplements guru remains atop its 20-week moving average, which has served as support since late April.


Featured Brokers
Unusual Option Volume
Option Flow
Most Active Stocks
Most Active Option Strikes
Largest Open Interest

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:

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

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