Groupon Options Price In Massive Post-Earnings Move

Groupon shares have a history of making big directional moves after earnings

Managing Editor
May 8, 2018 at 2:41 PM
facebook twitter linkedin

Online coupon concern Groupon Inc (NASDAQ:GRPN) is is slated to report its first-quarter results tomorrow morning as a busy week of earnings continues. On the charts, GRPN has pulled back about 17% from its late-November closing high to trade at $4.82, but appears to have recently reestablished support at its rising 50-day moving average.

Daily Chart of GRPN Since June With 50MA Take2

GRPN has a history of volatile post-earnings reactions. The stock's price action the day after earnings has been positive only 50% of the time over the last eight quarters, including a 22.8% jump following its February 2017 report -- but GRPN's average post-earnings daily price move is a healthy 16.4%, regardless of direction.

This time around, the options market is pricing in a much higher-than-usual 23.2% next-day move, per at-the-money implied volatility data from Trade-Alert. From the equity's current price, a move of this magnitude to the upside would put the shares around $5.94 -- just below the stock's Nov. 28 four-year intraday high of $5.99. On the other hand, a drop of 23.2% would place GRPN at its lowest levels since June 2017.

Short sellers have been hitting the exits lately on GRPN, with short interest down 8.3% in the last two reporting periods. However, at 9.5% of the equity's float --or 7.1 times GRPN's average daily trading volume -- short interest is still high enough to contribute to another volatile post-earnings move in the shares.


Now is the time to join our thriving community of Event Traders who consistently profit from every earnings season. With this discounted subscription opportunity, you'll stay ahead of the curve and seize opportunities others miss. Do not let Q3 earnings season pass you by – subscribe now and supercharge your portfolio with expert insights that turn market reactions into profit-generating opportunities!! Don't waste another second... join us right now before the next trade targeting +200% is released!