Shares of Energous Stock Soaring on FCC Nod

Options traders have been increasingly put-heavy on WATT

Managing Editor
Apr 10, 2018 at 10:04 AM
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Shares of electrical concern Energous Corp (NASDAQ:WATT) are soaring after the Federal Communications Commission (FCC) certified the company's WattUp technology after yesterday's close. In response, WATT stock was up a healthy 14.5% at $19.07, at last check.

Energous stock saw a massive bull gap in late December, thanks to a similar FCC nod, touching a record high of $33.50 on Dec. 28. However, WATT subsequently lost steam and pulled back to its 160-day moving average, due to broad-market headwinds and a Citron Research tweet. Today, the equity is set to close back above its 20-day moving average for the first time in a month.

Short interest on WATT rose 4.1% over the past two reporting periods, and now accounts for a massive 39% of the stock's total available float. At Energous stock's average daily trading volume, it would take over six sessions for the shorts to cover their bearish bets -- plenty of fuel for a short squeeze.

Options traders have been more bearish than usual towards WATT in recent weeks. Data from the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) shows Energous stock with a 10-day put/call volume ratio of 0.48, ranking in the 78th percentile of its annual range. Although the ratio indicates that calls still outnumber puts on an absolute basis, the elevated percentile implies that buyers have shown a greater-than-usual preference for puts over calls in the past two weeks.

Currently, the tech concern's Schaeffer's Volatility Index (SVI) sits at 74%. This reading ranks in the low 18th percentile of its annual range, indicating Energous stock's near-term options are pricing in relatively muted volatility expectations right now.


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