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Option Brief: Groupon Inc (NASDAQ:GRPN) calls are outpacing puts by a healthy margin this afternoon, and are trading at a 93% mark-up to their expected intraday rate. As such, the stock's 30-day at-the-money implied volatility (IV) is 4.4% higher at 53.6%. Attracting noteworthy attention today in GRPN's options pits is the June 9 call, where north of 5,200 contracts are on the tape -- powered largely by a block trade of 4,946 contracts, the stock's largest single transaction in today's session.
Almost all of the action at that out-of-the-money strike has occurred at the ask price, and volume outstrips open interest, collectively conveying that the calls were bought to open. Thus, the traders expect GRPN -- currently 2% lower at $7.98 -- will topple the 9 strike by June options expiration. With 16% of the equity's float sold short, it's also possible that these calls were purchased by short sellers to serve as protection against a potential rally. Either way, the most the traders stand to lose is the initial cash outlay, if GRPN is sitting at or below the strike price at the close on Friday, June 20, when the options expire.
Looking at the charts, Groupon Inc (NASDAQ:GRPN) hasn't traded above $9 since Feb. 20, when a poorly received earnings report sent the shares almost 22% lower in the subsequent session. The company's next quarterly report is tentatively scheduled for the week of May 5. Analysts are expecting a per-share loss of 3 cents from GRPN.