Options Market Braces for Big Earnings Swing for Switch Stock

Short interest accounts for over 17% of the stock's float

by Emma Duncan

Published on Nov 12, 2018 at 1:00 PM

Shares of Switch Inc (NYSE:SWCH) are slightly lower in afternoon trading, down 0.9% at $9.21, at last glance, as traders gear up for the company's third-quarter earnings. The security's fifth-ever report is slated to surface after the market closes tomorrow, Nov. 13. Below, we will dive into what the options market is expecting for the stock's post-earnings moves, and take a look at how SWCH has been faring on the charts.

Overall, the technology name has struggled on the charts since its initial public offering (IPO) this time last year. Specifically, a series of post-earnings bear gaps and pressure from the falling 50-day moving average have contributed to the stock's underperformance. Year-to-date, SWCH has shed 49%.

Daily Chart SWCH 50 MA

Digging into its brief earnings history, SWCH has closed lower the day after all four previous earnings reports, including a 22.4% drop last quarter. Looking broader, the shares have averaged a 14.6% loss the day after earnings. This time around, SWCH options are pricing in a 24% swing for Wednesday's trading.

Lastly, short interest on SWCH represents a healthy 17.3% of the stock's total available float. This means, at the tech name's average pace of trading, it would take short sellers just over seven days to buy back their bearish bets.

a schaeffer's exclusive

5 HOT STOCK PICKS

Heat up your summer trading with this FREE insider report!


 
 

Partnercenter


NEW! Explore Schaeffer’s Partners' deals and get connected to top online brokerages with deals tailored exclusively for our readers.  Get answers to your questions regarding transfer fees, commission rates, programs and available discounts related to online trading services.

MORE | MARKETstories


The Future of Marijuana is in the "Priceline of Pot"
Click to continue to advertiser's site.
Bull Notes for Snap, Pinterest Stocks
It's a big morning for social media stocks
Analyst Upgrades BAC Stock, Targets 32% Upside
The brokerage firm thinks valuation and consensus estimates "look too low"
The "Trick" Used By the World's Wealthiest
A simple way to stop picking losers, and start cashing in like Wall Street's elite.