Options Traders Bet on Bigger Losses for Oversold Tilray Stock

There's huge open interest at TLRY's March 20 put

Dec 14, 2018 at 9:50 AM
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Weed stock Tilray Inc (NASDAQ:TLRY) has been relatively quiet recently, at least compared to the noise it created back in September when it traded in a 150-point range in a single session, eventually topping out at an even $300. Since then, the shares have been sliding lower, yesterday notching their lowest close since August. It's been over two weeks since TLRY stock settled atop its 10-day moving average, and it's down again today following the company's latest cannabis investment.

At last check, the equity was down 3.2% at $73.13, after the company announced it's investing in Quebec's ROSE Lifescience. Technically, TLRY could be due for a bounce, since its 14-day Relative Strength Index (RSI) was teetering right on the edge of oversold territory coming into today, checking in at 30.

Options traders have remained committed to their call-buying ways in the meantime. More specifically, roughly 17,000 calls were bought to open during the past 10 days at the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), compared to 14,271 puts.

But while calls have continued to have the edge across these exchanges, puts dominate the top of Tilray's biggest open positions list. The most popular TLRY option overall, based on total open interest, is the March 20 put, where data hints at mostly buy-to-open activity, meaning some traders are betting on a huge slide in TLRY shares.

This deep out-of-the-money put is followed by the December 50 put, and then the January 2019 60-strike put. The former option has seen mostly buy-to-open action, as well, while the latter has seen sell-to-open activity. It's probably also worth pointing out the brow-raising open interest at the December 200 call, where 4,325 contracts are open.


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