Upstart Stock Soars After Stellar Results

Options bulls are targeting UPST after the event

Deputy Editor
Feb 16, 2022 at 10:16 AM
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The shares of Upstart Holdings Inc (NASDAQ:UPST) are soaring today, up 27.3% at $138.87 and one of the best stocks on the tech-heavy Nasdaq today. The breakout comes after the artificial intelligence company's outstanding fourth-quarter report and upbeat outlook, with revenue increasing three-fold. To follow, Piper Sandler raised its price target by $7 to $230. 

UPST is headed for its best single-session gain since March 2021. This jump also has the stock breaking out past pressure at the $120 level, which kept a cap on gains over the past month, as well as its 40-day moving average. Year-over-year, the equity is up 50%. 

The equity is ripe for a short squeeze. Short interest has increased by 19.4% in the most recent reporting period, and the 8.21 million shares sold short accounts for a healthy 11% of UPST's total available float.

Options bulls are scrambling today, with 51,000 calls across the tape so far -- nearly double the amount of puts. Traders aren't shying away, either, with overall options volume pacing for the top percentile of its annual range. The February 150 call is the most popular, followed by the 140 call in the same series, with new positions being bought to open at both. 

The good news for prospective options traders is the security's Schaeffer's Volatility Scorecard (SVS) sits at a high 99 out of 100. This means Upstart stock has exceeded option traders' volatility expectations during the past year.


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