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Despite plummeting right out of the gate, Zynga Inc (NASDAQ:ZNGA - 2.40) still has a few fans in the options pits. In early afternoon trading, the social gaming guru has already seen roughly 38,000 calls cross the tape -- about five times its average midday call volume, and almost three times the number of ZNGA puts exchanged.
Most popular by a mile has been the weekly 2.50-strike call, which has seen more than 18,500 contracts change hands on open interest of fewer than 4,000, pointing to an influx of last-minute bets. Plus, more than 75% of the calls traded at the ask price, suggesting they were bought.
By purchasing the calls to open, the buyers are expecting ZNGA to bounce back by the end of the session, when the options expire. More specifically, the calls traded at a volume-weighted average price (VWAP) of $0.03, meaning the buyers will reap a reward if ZNGA muscles back atop the $2.53 level (strike plus average premium paid) by the closing bell. However, even if ZNGA remains entrenched in the red, the most the traders can lose is the initial premium paid for the calls.
From a broader sentiment standpoint, today's optimism in the options pits is nothing new for ZNGA. During the past two weeks, speculators on the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) have bought to open 62 calls for every put on the stock. However, considering the shares are trading in the low single digits, there's little downside potential for put buyers.
Elsewhere on Wall Street, analysts are far less hopeful. Currently, the stock boasts just three "buy" or better ratings, compared to 16 "hold" or worse recommendations.
Technically speaking, it's no surprise that the brokerage bunch is bearish. ZNGA has given up more than three-quarters of its value in 2012, shedding nearly 8% today after reducing its dependence on Facebook Inc (NASDAQ:FB). Earlier in the session, ZNGA touched an intraday low of $2.37, but found a foothold in the form of its 10-day moving average.