Options Traders Flock Toward GOOS After Earnings

The stock has added nearly 50% already this year

Deputy Editor
Feb 4, 2021 at 10:10 AM
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The shares of Canada Goose Holdings Inc (NYSE:GOOS) are scaling the New York Stock Exchange (NYSE) this morning, up 24.9% at $55.87 at last check. This comes after the outerwear maker notched a top and bottom line beat on its fiscal third-quarter report. Strong growth in China, coupled with a surge in online sales, helped Canada Goose's results, though the company withheld an outlook for fiscal 2021 as the pandemic continues to cause disruptions.

Out of the gate, GOOS soared to $45, a new annual high. The shares are now up 48.7% in 2021, spring-boarding off their 100-day moving average back in early January. 

Shorts are building their positions, making the stock ripe for a short squeeze. In the last two reporting periods, short interest rose 14.8%, and now the 9.93 million shares sold short account for a healthy 17% of the stock's available float -- over six days' worth of pent-up buying power. Should short interest roll over, a massive short-covering rally could be in store.

Options traders have been hesitant to come aboard. The equity's 10-day put/call volume ratio of 1.03 at the Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) stands higher than 85% of all readings from the last year. This shows long puts being picked up at a faster-than-usual clip, and an unwinding of this bearish attention could bode well for the stock.

Today though, calls rule the roost. Already, 8,332 calls and 2,336 puts have crossed the tape -- a staggering 16 times the intraday average amount. The weekly 2/5 45-strike call is by far the most popular, with new positions being opened there.

 

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