Gogo Inc (GOGO) Volume Surges as Stock Nosedives

Concerns about a terminated contract with AAL have GOGO in the red

Feb 16, 2016 at 11:40 AM
facebook twitter linkedin


In-flight connectivity concern Gogo Inc (NASDAQ:GOGO) is down 35.8% at $8.92, and just off a record low of $7.90, after American Airlines Group Inc (NASDAQ:AAL) reportedly said it could terminate its contract in favor of Internet service from ViaSat, Inc. (NASDAQ:VSAT). Amid accelerated stock volume, GOGO is on the short-sale restricted list, and options are flying off the shelves.

GOGO stock volume has already eclipsed its Feb. 25 annual high of roughly 4.7 million contracts, with more than 9.6 million shares traded so far. GOGO's 30-day at-the-money implied volatility was jolted 42% higher to a 12-month peak of 112.6%, with options trading at 11 times the average intraday pace. Puts have nearly doubled calls thus far, and the intraday put/call volume ratio of 1.83 is higher than normal, in the 84th percentile of its annual range.

While short sellers can't hop on GOGO today, there are plenty of bears already cheering the decline. Short interest accounts for a whopping 35.5% of the stock's total available float, and would take nearly 22 days to buy back, at GOGO's average daily trading volume.

On the charts, Gogo Inc (NASDAQ:GOGO) could struggle to find support. The stock has already breached the round-number $10 region, as well as the $12-$13 area -- which contained pullbacks since May 2014. Furthermore, GOGO is sitting well south of peak put open interest at the soon-to-expire February 15 put.

160216GOGO

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.

 

Minimize Risk While Maximizing Profits

There is no options strategy like this one, which consistently minimizes risk while maintaining maximum profits. Perfect for traders looking for ways to control risk, reduce losses, and increase the likelihood of success when trading calls and puts. The Schaeffer’s team has over 41 years of options trading success targeting +100% gains on every trade. Rest assured your losses are effectively limited to your initial cost at the time of making your move! Don't waste another second... join us right now before the next trade is released! 

 


 


 
Special Offers from Schaeffer's Trading Partners