Will SCOTUS Ruling Spook XO Group Inc. (XOXO) Shorts?

Supreme Court decision on same-sex marriage lends XO Group Inc (XOXO) a technical boost

Jun 26, 2015 at 2:07 PM
facebook twitter linkedin


This morning, the Supreme Court of the United States (SCOTUS) issued a ruling that same-sex partners have a constitutional right to marry -- doing away with state bans against the practice. Not only did SCOTUS' decision cause a flurry of news across the various major news outlets, but it is also causing a bit of a bump for XO Group Inc (NASDAQ: XOXO). The parent company for The Knot, The Bump, and The Nest advanced nearly 4% in the immediate wake of the announcement, with some firms estimating the ruling will translate into a "gay-marriage stimulus package."   

The shares have backed off a bit, but are still about 1.1% higher on the day, at $16.23.
XOXO's site director told MarketWatch, "As we celebrate the Supreme Court's decision to legalize marriage equality for the entire country, our study shows that LGBTQ couples are hosting intimate weddings, with a focus on the guest experience and lots of personalized details."  

Technically, if you want the definition of a stock caught in a sideways trend, you should look to XOXO. The stock has spent most of 2015 bumping into resistance at $18, only to find support in the $15.50-$16 region. What may be encouraging is the stock's 10-month moving average is moving into the $15.50 area, and could help the shares break out. 

On the sentiment side, however, Wall Street isn't optimistic. The stock's Schaeffer's put/call open interest ratio (SOIR) of 1.05 stands higher than 92% of all other readings from the past year, suggesting short-term option traders are more put-heavy than usual. Likewise, short interest on XO Group Inc (NYSE:XOXO) surged 34.2% during the past two reporting periods.

Meanwhile, other stocks that saw post-SCOTUS jumps include jewelry retailers Blue Nile Inc (NASDAQ:NILE) and Signet Jewelers Ltd. (NYSE:SIG), as well as luxury goods titan Tiffany & Co. (NYSE:TIF). 
 

Stop leaving money on the table with the same old broken options trading approach...

There is no options strategy that more perfectly capitalizes during earnings season better than this simple call and put buying strategy. Perfect for aggressive traders looking to recover their suffering portfolios so far in 2022. With the simplest possible options strategy, Schaeffer's team with 100+ years of options trading excellence, target 200% gains on every single trade. So many trades are being beaten down by the market, but don't be one of them! Don't waste another second... join us right now before the next trade is released! 

 
Schaeffer's Daily Bulletin Offer
 


 


 
Special Offers from Schaeffer's Trading Partners