DryShips Inc. (DRYS) Options Hot Amid Bankruptcy Buzz

DryShips Inc. (NASDAQ:DRYS) raised "substantial doubt" that it will remain in business

Jun 7, 2016 at 10:34 AM
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After defaulting on three loan payments, bulk shipper DryShips Inc. (NASDAQ:DRYS) raised "substantial doubt" that it will remain in business. Amid this bankruptcy buzz, the shares have plunged 42% to $1.37, fresh off an all-time low of $1.30. What's more, the stock is squarely on the short-sale restricted list, while options are trading at four times what's typically seen at this point in the day.

Despite this morning's accelerated options activity, volume remains low on an absolute basis -- with just 216 calls and 60 puts on the tape at last check. As a point of comparison, DRYS options activity hit an annual high on Dec. 28, when 5,196 contracts were traded.

Outside of the options pits, skepticism has been ramping up toward DRYS. Short interest, for example, shot up 156.4% in the most recent reporting period to 600,000 shares. In fact, this is the highest number of shorted DRYS shares since July 2012 -- when the stock was trading in the $50 range.

Technically, DryShips Inc. (NASDAQ:DRYS) hit its peak of $3,161.28 in October 2007. More recently, the shares have plunged 92.5% over the past 52 weeks.

DRYS daily chart

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