The Comment Sending Etsy Inc (ETSY) to the Moon

Etsy Inc (ETSY) call volume is at 46 times what's expected at this point in the session

Jul 17, 2015 at 1:56 PM
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Etsy Inc (NASDAQ:ETSY) is taking off after a Google Inc (NASDAQ:GOOGL) executive unexpectedly mentioned the e-commerce site during a post-earnings conference call. "Developers like Etsy are already seeing a boost in traffic as a result of deep linking," GOOGL Chief Business Officer Omid Kordestani said. The news has ETSY's options pits in overdrive, with calls running at 46 times the usual intraday rate, and the equity's at-the-money implied volatility fresh off a record high of 110.3%.

Diving deeper, 27,000 calls are on the tape versus 11,000 puts. Seeing the most attention, by far, is the now in-the-money July 20 call -- where traders may be buying to open positions in the hopes of extended gains through today's close, when the front-month series expires. ETSY has already soared 24.1% to trade at $20.90, putting the stock above the trade's breakeven mark of $20.44 (strike plus the volume-weighted average price of $0.44).

One group that's likely not pleased with ETSY's banner performance is short sellers. Over 8% of the equity's float is sold short, and would take close to six sessions to buy back, at typical trading volumes. In fact, a portion of today's upside may be the result of shorts covering their bearish bets.

It should be noted that Etsy Inc (NASDAQ:ETSY) is hardly the only stock staring at massive gains this afternoon. In fact, a number of social media names are breaking out, and GOOGL itself is setting record highs thanks to an earnings beat.

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