Streaming Stock Buzzing on Amazon Partnership

Calls have been flying off the shelves for SIRI during the past 10 weeks

Managing Editor
Oct 18, 2018 at 9:42 AM
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Shares of streaming name Sirius XM Holdings Inc (NASDAQ:SIRI) are popping in early trading, after the company announced a new partnership with Amazon (AMZN) that includes offering a three-month trial of its products to consumers who purchase Amazon's Echo Dot smart speaker. In response, SIRI is up 1.3% at $6.33, at last check.

It's been a rough stretch for Sirius XM stock, which recently gapped lower after news broke in late September that it plans to buy sector peer Pandora (P) for about $3.5 billion. Since then, the shares have struggled to top the $6.30-$6.50 ceiling, site of that recent bear gap. However, SIRI is still up 18% year-to-date.

Looking in the options pits, data from the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) shows the streaming name with a 50-day call/put volume ratio of 11.46, ranking in the 94th annual percentile. This indicates that calls have been purchased over puts at a much faster-than-usual clip over the last 10 weeks.

Some of this burst of call buying could be attributable to shorts hedging against any unexpected upside. Short interest on SIRI rose 6.5% during the most recent reporting period, and now represents 16% of the stock's total available float. At the security's average pace of trading, it would take shorts over eight days to buy back the 205.28 million shares currently sold short.

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