Call Buying Picks Up On Struggling IAC/InterActiveCorp (IACI)

IAC/InterActiveCorp (IACI) calls are crossing the tape at 29 times the average intraday pace

Jan 22, 2015 at 1:58 PM
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Option bulls have taken aim at IAC/InterActiveCorp (NASDAQ:IACI) in recent weeks. At the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), for example, the stock's 10-day call/put volume ratio of 57.67 ranks in the 86th percentile of its annual range, meaning calls have been bought to open over puts at a faster-than-usual clip.

Echoing this is IACI's Schaeffer's put/call open interest ratio (SOIR) of 0.44, which rests lower than 68% of similar readings taken in the past year. In other words, short-term speculators are more call-heavy than usual toward the security.

It's a similar set-up in today's trading, with calls crossing the tape at 29 times the average intraday rate, and outpacing puts by a 71-to-1 margin. Near-term contracts are in high demand, too, as evidenced by IACI's 30-day at-the-money implied volatility, which has jumped 6.2% to 34.2%.

Most active by a mile is the equity's March 70 call. Nearly 6,000 contracts have changed hands here -- representing 85% of the total intraday call volume -- and it appears most of the contracts have been bought to open. By initiating the long calls, traders expect IACI to be sitting north of the strike when the contracts expire at the close on Friday, March 20 -- a time frame that includes the Internet issue's next turn in the earnings confessional, after the market closes on Tuesday, Feb. 3.

On the charts, IAC/InterActiveCorp (NASDAQ:IACI) has struggled since hitting a record peak of $80.64 last March, shedding more than 22% of its value to trade near $62.50. More recently, the security has been pressured lower by its 80-day moving average since early November.

Daily Chart of IACI Since March 2014 With 80-Day Moving Average
 

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