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Options Traders Snag OpenTable Calls, Despite Poor Price Action

OPEN call volume swells in the options pits

by 11/29/2011 2:52 PM
Stocks quoted in this article:

Options players have shown OpenTable (OPEN - 33.02) an abundance of bullish attention today, as roughly 14,000 calls have changed hands so far, representing seven times the equity's expected intraday call volume. More than 7,100 of these calls were traded at the out-of-the-money December 37.50 strike -- most of them at the ask price, pointing to buyer-driven activity. This option currently carries open interest of just 2,866 contracts, making it safe to say that new positions are being initiated here today.

What's more, the Schaeffer's put/call open interest ratio (SOIR) for OPEN rests at 0.76, indicating that calls outnumber puts among options slated to expire within three months. This ratio ranks in the 24th percentile of its annual range, confirming that short-term options traders have been more bullishly slanted toward the stock just 24% of the time during the past 12 months.

Meanwhile, short interest on OPEN fell by almost 3% over the past two reporting periods. However, these bearish plays still account for a whopping 52.85% of the equity's float, suggesting that some of the recent call volume might be the result of shorts looking to hedge their bets. Either way, it would take nearly a week to buy back these shorted shares, at the stock's average daily trading volume.

Technically, OPEN has shed approximately 54% of its value year-to-date, and has underperformed the broader S&P 500 Index (SPX) by close to 45% during the past 60 sessions. A look at the charts shows that the stock has been pinned underneath resistance at its 10-week and 20-week moving averages since May. In fact, OPEN just tagged a new 52-week low of $31.54 earlier in the session.

At last check, however, the equity is up about 2% and is trading at $33.02.


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