JD.com Stock Gaps Higher on Trade Hopes

FIT stock is on track for its biggest one-day gain to date

Nov 1, 2018 at 3:18 PM
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The U.S. stock market is higher today on trade optimism. Among individual names making big moves are wearable tech firm Fitbit Inc (NYSE:FIT), Chinese e-commerce name JD.com, Inc. (NASDAQ:JD), and molecular diagnostics specialist Myriad Genetics, Inc. (NASDAQ:MYGN). Here's a quick look at what's moving shares of FIT, JD, and MYGN.

Fitbit Earnings Boosted By Smartwatch Sales

Fitbit stock is up 27% to trade at $6.02 -- on track for its best day ever by far -- after the company unexpectedly swung to a third-quarter profit. Revenue also exceeded estimates on strong smartwatch sales.

Most analysts are skeptical of FIT stock, though the shares bounced off its record low in mid-October after a rare upgrade. Options traders, on the other hand, have preferred calls -- a trend seen in today's trading. Roughly 50,000 calls have changed hands, four times what's typically seen at this point and nearly double the number of puts on the tape.

The weekly 11/2 6-strike call is most active, and it looks like some of the options are being bought to open for a volume-weighted average price (VWAP) of $0.13. If this is the case, breakeven at tomorrow's close is $6.13 (strike plus premium paid).

JD Call Options are Popular Today

Chinese stocks are higher on trade hopes, with the shares of JD.com up 7% at $25.18. This would mark the stock's best one-day gain since May 2017, and has JD on pace to close above its 40-day moving average for the first time since July 9.

Calls are outpacing puts by a 2-to-1 margin today, and new positions are likely being purchased at the weekly 11/2 26-strike call. More broadly, the November 24 put is home to peak front-month open interest of 41,281 contracts, though data from the major options exchanges confirms significant sell-to-open activity here.

Myriad Genetics Stock Breaches Key Technical Levels

Myriad Genetics stock has plummeted 12.2% to trade at $39.55, with some pointing to the Food and Drug Administration's (FDA) approval of 23andme's medication metabolism test. MYGN has now broken below a trendline connecting lower lows since early September, and set to close south of its 200-day moving average for the first time since May 7.

The company will report earnings after the market closes next Tuesday, Nov. 6, and options traders have been buying to open puts over calls at a quicker-than-usual clip. At the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX PHLX (PHLX), MYGN's 10-day put/call volume ratio of 3.14 ranks in the 94th annual percentile.


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