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Call players have been eyeing the $3 mark on Zynga Inc (NASDAQ:ZNGA) for some time now. On Wednesday, optimistic option players scooped up 2,452 weekly 5/10 3-strike calls for a volume-weighted average price (VWAP) of $0.24. Nearly all of the calls crossed at the ask price, and open interest added 2,125 positions overnight, pointing to buy-to-open activity. While these calls are currently in the money, ZNGA needs to move north of $3.24 (strike price plus the VWAP) by tomorrow's close in order for the options to be profitable. This breakeven mark is just a chip shot away from the stock's present price of $3.22.
From a wider sentiment standpoint, option players have rarely been more bearishly aligned toward Zynga Inc. At the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), the stock's 10-day put/call volume ratio of 0.33 ranks higher than 83% of similar readings taken in the past year. In other words, puts have been bought to open over calls at an accelerated clip in recent weeks.
Additionally, the equity's Schaeffer's put/call open interest ratio (SOIR) of 0.77 ranks in the 93rd percentile of its annual range. Simply stated, short-term speculators have been more put-heavy toward ZNGA only 7% of the time within the last year.
On the charts, Zynga Inc (NASDAQ:ZNGA) has added an impressive 36% year-to-date. From a longer-term perspective, though, the stock has been a technical laggard, and, over the past 52 weeks, has surrendered more than 59%. In today's session, ZNGA has shed around 1.1% at last check, but has managed to find a foothold atop its 80-day moving average. This trendline has been breached on a daily closing basis just five times since the start of the year.