Energous Corp (WATT) Takes Off After Key FCC Approval

Energous Corp (NASDAQ:WATT) is in Wall Street's crosshairs after the FCC approved its miniature Wattup solution

by Josh Selway

Published on May 25, 2016 at 10:48 AM

Shares of tech stock Energous Corp (NASDAQ:WATT) are on the move today, after the Federal Communications Commission (FCC) approved the company's miniature Wattup solution, opening the door for its use in various electronic devices. After rallying as much as 10.6% out of the gate amid heavy volume, WATT has pared its gains, even briefly flirting with negative territory, but was last seen up 2.3% at $10.39. 

This is seemingly good news for WATT options traders, who -- amid relatively light volume -- have taken to calls over puts. Specifically, the stock's 10-day call/put volume ratio at the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) comes in at 7.68. Plus, WATT's Schaeffer's put/call open interest ratio (SOIR) of 0.30 ranks in the 17th percentile of its annual range, indicating an unusual call-skew among short-term speculators. 

At the same time, WATT is heavily shorted, suggesting call options may have been used by short sellers to hedge against an upside move in the stock. In fact, more than 18% of the WATT's float is sold short, representing nearly a week's worth of buying power, at typical trading volumes. 

Analysts' opinions on the stock is clear, however. All those providing coverage on WATT rate it a "strong buy," and the average 12-month price target of $14 represents annual-high territory.

Looking at the charts, Energous Corp (NASDAQ:WATT) -- which was first publicly traded in March 2014 -- was relatively quiet throughout all of 2015. The stock has picked up steam in recent months, though, with WATT sporting a year-to-date lead greater than 31%, and seemingly finding a home atop the round-number $10 level -- today's intraday low.  

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