FireEye Stock Extinguished After Security Breach

The news is attracting lots of attention from options traders

Deputy Editor
Dec 9, 2020 at 11:01 AM
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FireEye Inc (NASDAQ:FEYE) is feeling the heat today after the cybersecurity firm disclosed that it was attacked by a "highly sophisticated cyber threat actor," and that its internal hacking tools -- which are typically reserved to privately test the cyber defenses of its own clients -- were stolen. This news has tanked the security, which is down 12.2% at $13.63 at last check. 

This marks a setback for FEYE, which had been steadily climbing back up the charts following an early September pullback. While shares were able to recoup fairly quickly, reclaiming the 40-day moving average as an area of support in October, the equity is slipping back below this trendline today. Year-to-date, FEYE is down 17.6%. 

Short sellers were hitting the exits in droves after FireEye stock's recent climb. Short interest dropped 7.9% in the last reporting period, though the 22.87 million shares make up 10.7% of the stock's available float, or over a week's worth of pent-up buying power. Today's price action would have given these bears something to celebrate, had FEYE not just landed on the short-sale restricted (SSR) list. 

Options players are coming out in droves, though. So far, 20,000 calls have crossed the tape, or four times the intraday average, compared to 14,000 puts -- a whopping 25 times what is typically seen at this point. The December 14 call is the most popular, followed by the weekly 12/11 13.50-strike put, with positions being opened at both. 

 

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