Options Traders Target Splunk Stock After Buyout Offer

The stock is contending with overhead pressure on the charts

Deputy Editor
Feb 14, 2022 at 10:28 AM
facebook twitter linkedin


The shares of Splunk Inc (SPLK) are up 7.6% to trade at $123.15, after news came over the weekend that Cisco (CSCO) recently made an offer to buy the company for over $20 billion, though representatives from the two companies declined to comment. Options traders aren't shying away, with options volume running at three times its intraday average. The February 130 call is the most popular, followed by the February 105 put. 

During the past 50 days at the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), traders have been bullish, driving the call/put volume ratio for that time to 2.83. This ranks in the 84th annual percentile, showing there's been particularly high demand for long SPLK calls.

Splunk stock has been struggling to break out above the $124 level since its Dec. 17 annual low of $105.45. The 70-day moving average, which the stock slipped below during its mid-November bear gap, appears to be keeping a cap on gains today. Year-over-year, SPLK is down 29%, though it sports a 6.5% year-to-date lead. 

It's also worth noting that short interest represents 5.3% of the stock's available float. In other words, it would take over three days to buy back these bearish bets, at the security's average pace of trading. 

 

 

 

 

Stop leaving money on the table with the same old broken options trading approach...

There is no options strategy that more perfectly capitalizes during earnings season better than this simple call and put buying strategy. Perfect for aggressive traders looking to recover their suffering portfolios so far in 2022. With the simplest possible options strategy, Schaeffer's team with 100+ years of options trading excellence, target 200% gains on every single trade. So many trades are being beaten down by the market, but don't be one of them! Don't waste another second... join us right now before the next trade is released! 

 
Schaeffer's Daily Bulletin Offer
 


 


 
Special Offers from Schaeffer's Trading Partners