Option Traders Find Opportunity on Battered LinkedIn Corp (LNKD)

Oversold LinkedIn Corp (NYSE:LNKD) is bouncing from three-year lows to trade north of the century mark

by Kirra Fedyszyn

Published on Feb 11, 2016 at 3:50 PM

Social networking stocks are at the forefront of traders' attention today, with Twitter Inc (NYSE:TWTR) floundering amid concerns of stalled growth, Zynga Inc (NASDAQ:ZNGA) hitting record lows, and Facebook Inc (NASDAQ:FB) bucking the trend lower. But below we'll check in with professional networking stock LinkedIn Corp (NYSE:LNKD), which is just coming off its worst single day of trading in the company's history.

Last Friday, LNKD gapped nearly 44% lower after its 2016 guidance spooked investors. 
In the days since, LNKD touched a three-year low of $98.25 on Wednesday, and is trying to establish a round-number floor atop the century mark. The stock has managed to add 1% to trade at $102.75 today, and sports a 14-day Relative Strength Index (RSI) of 17 -- in oversold territory. 

Option players are likely hoping for a rebound in the battered shares. Specifically, LNKD's 50-day call/put volume ratio of 1.44 at the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) is higher than 90% of all readings from the past year.

And near-term traders have been call-heavy in the extreme -- the stock's Schaeffer's put/call open interest ratio (SOIR) of 0.63 is at an annual low. Call open interest on LNKD is also now at a yearly peak.

There could be incentive for option traders to get in on the action now, too; LinkedIn Corp's (NYSE:LNKD) Schaeffer's Volatility Scorecard (SVS) is at 95, meaning the stock has been making outsized moves compared to what the options market has priced in over the past year.

Sign up now for Schaeffer's Market Recap to get all the day's big stock movers, must-know technical levels, and top economic stories straight to your inbox.


A Schaeffer's exclusive!

The Expert's Guide

Access your FREE trading earning announcements before it's too late!


 
 

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


Look Who's Going Bankrupt Next in America
Porter Stansberry is making a concerning prediction.
CE Stock Heading into Bullish Month
Celanese stock is coming off a free fall from its all-time-high in late 2019
HD Stock Sinks on Bear Notes, In-Store Changes
Home Depot stock received price target cuts after sharing in-store changes
Look Who's Going Bankrupt Next in America
Porter Stansberry is making a concerning prediction.