It's a Good Time to Buy Hologic Put Options

Short-term Hologic puts are pricing in lower volatility expectations than calls at the moment

Nov 24, 2017 at 10:51 AM
facebook X logo linkedin

Hologic, Inc. (NASDAQ:HOLX) said it has received 510(k) clearance from the U.S. Food and Drug Administration (FDA) for its Quantra 2.2 breast density assessment software -- used in breast cancer screenings. Despite an initial uptick at the open, HOLX stock is failing to capitalize on the news, last seen fractionally lower at $40.87. As the shares continue to struggle at a key technical juncture, skeptical traders are likely breathing a sigh of relief.

Taking a closer look at Hologic stock's chart, the shares are currently trading just above their 2017 breakeven mark of $40.12, which roughly coincides with their 120-day moving average. The equity climbed back into positive year-to-date territory after bouncing from their mid-October annual low near $36. However, HOLX appears to be running out of steam near $40.90, home to its 140-day moving average and near its early August bear-gap highs.

holx stock daily chart nov 24

Short sellers, meanwhile, have been actively betting against the healthcare stock. In the past two reporting periods, short interest on Hologic has spiked 50% to 10.84 million shares -- the most since January 2016. This still only represents 4% of the equity's available float, or 4 times HOLX's average daily pace of trading.

Options traders, on the other hand, have remained relatively quiet on HOLX, with just 365 total contracts bought to open on the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) in the past 10 days, though most of the action occurred on the put side. Overall, total HOLX open interest is comprised of 23,040 contracts, and is docked in the middling 51st annual percentile.

Those looking to trade options on HOLX may want to consider short-term puts, considering they're priced at relatively attractive levels at the moment. The stock's Schaeffer's Volatility Index (SVI) of 21% ranks in the 8th annual percentile, suggesting near-term options are inexpensive, from a volatility standpoint. Plus, Hologic's 30-day at-the-money implied volatility skew of 8.3% ranks lower than 75% of all comparable readings, meaning put options are pricing in lower volatility expectations, compared to call options.


Target Effortless Triple-Digit Gains Every Sunday Evening For Life!

This is your chance to triple your profit potential on Sunday evenings, without spending all your free time watching the market.

On Sundays, as a Weekend Plus subscriber, you’ll get up to 6 trades every Sunday, each targeting gains of 200% or more.

Start targeting gains like the ones our subscribers have seen recently, including:

213.3% GAIN on AutoNation calls
100.0% GAIN on Monster Beverage calls
100.4% GAIN on Walgreens Boots Alliance puts
100.4% GAIN on ON Semiconductor calls
257.7% GAIN on Dell calls

101.0% GAIN on Apollo Global Management calls
103.6% GAIN on JP Morgan  Chase calls
105.3% GAIN on DraftKings calls
101.3% GAIN on Airbnb calls
203.0% GAIN on Shopify calls
102.0% GAIN on Cboe Global Markets calls
100.9% GAIN on Boeing calls
102.1% GAIN on Microsoft puts
102.3% GAIN on First Solar calls
101.5% GAIN on PulteGroup calls
101.0% GAIN on Apple calls
209.4% GAIN on NXP Semiconductors calls
100.8% GAIN on Uber Technologies calls
100.4% GAIN on Academy Sports and Outdoors puts
102.2% GAIN on Trade Desk calls
100.8% GAIN on DoorDash calls
100.0% GAIN on Camping World Holdings puts
100.0% GAIN on Cboe Global Markets calls
100.2% GAIN on calls
238.5% GAIN on Oracle calls



Rainmaker Ads CGI