Amazon Partnership Puts Travelers Stock In Focus

Options traders have shifted toward calls from puts on TRV

Josh Selway

Oct 10, 2018 at 9:27 AM

AMZN
TRV

Travelers Companies Inc (NYSE:TRV) is grabbing headlines thanks to news of a partnership with Amazon.com (AMZN) that will allow the insurance giant to sell home security products to customers on the e-commerce site. TRV shares closed Tuesday's session at $131.59, right near the 320-day moving average and well below their January peak of $150.55. Moreover, the $134-$135 region blocked a recent breakout attempt, an area home to a notable April bear gap.

In the options pits, traders have started to target calls over puts, though volume overall has been light in recent weeks. The 10-day call/put volume ratio is 5.57 at the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), which ranks in the 88th annual percentile. Compare this to the 50-day call/put volume of just 0.29, and clearly there's been a shift in sentiment from options traders.

Most analysts are already skeptical of Travelers stock. There are 16 brokerage firms in coverage, and 10 of them have "hold" or worse recommendations. Meanwhile, the average 12-month price target stands up at $138.29, near where the shares were trading before the aforementioned April bear gap.

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