CyberArk Software Stock Surges on Upgrade

CYBR call options are active already this morning

Sep 27, 2018 at 10:12 AM
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The shares of cybersecurity firm CyberArk Software Ltd (NASDAQ:CYBR) are higher this morning, thanks to some upbeat analyst attention. Morgan Stanley upgraded CYBR stock to "overweight" from "equal weight," and hiked its price target by 30% to $92. The analyst also upped their long-term revenue estimates for CyberArk, waxing optimistic on the firm's near-term demand and long-term growth durability prospects. At last check, CYBR was up 6.3% to trade at $78.13.

The equity is within striking distance of its Sept. 12 all-time high of $78.36. The shares have now added nearly 88% in 2018, with pullbacks contained by their 40-day and 100-day moving averages.

Options traders have been upping the bullish ante on CYBR, buying to open calls over puts at a faster-than-usual clip in the past two weeks. Data from the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) shows the security with a 10-day call/put volume ratio of 7.43 -- in the 72nd percentile of its annual range.

Today, CYBR calls are crossing the tape at 14 times the average intraday pace, with nearly 1,400 contracts traded in the first half-hour of the session. That's compared to fewer than 150 puts exchanged so far.

However, some of the recent call buying -- particularly at out-of-the-money strikes -- could be attributable to new shorts hedging their bearish bets. Short interest on CyberArk stock soared 27% in just the most recent reporting period.

Whatever the motive, short-term options buyers have been speculating on CYBR at a relative discount. The stock's Schaeffer's Volatility Index (SVI) stood at 32% as of last night's close, in just the 10th percentile of its annual range. This indicates that near-term options are pricing in relatively low volatility expectations for CYBR shares.


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