Etsy Stock Surges After Strong Quarterly Results

The stock was up over 15% earlier today

Deputy Editor
Feb 25, 2022 at 11:09 AM
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The shares of Etsy Inc (NASDAQ:ETSY) are up 7.1% at $137.70 at last glance, earlier trading as high as $149.00. The crafty e-commerce platform reported fourth-quarter earnings of $1.11 per share on revenue of $717.14, which is much higher than the 79 cents per share and $685.45 anticipated by analysts. ETSY is brushing off no fewer than four price-target cuts as well, which came after the company's first-quarter guidance came in below expectations. 

ETSY has been falling on the charts since its late-November record peak of $307.75, with pressure at the 20-day moving average helping to guide the shares lower. Yesterday, the stock bottomed out at $109.38 -- its lowest level since September 2020. Year-to-date, the equity is down over 37%. 

Options traders are targeting Etsy stock at nine times the intraday average today, with 18,000 calls and 18,000 puts across the tape so far. The weekly 2/25 119-strike call is the most popular by far, followed by the 140- and 150-strike calls in the same weekly series, with all three expiring today. 

The options pits were bearish ahead of the earnings event, as per ETSY's 10-day put/call volume ratio of 1.86 at the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX). This ratio stands higher than 99% of readings from the past year, indicating puts being picked up at a much faster-than-usual rate. 

Now could be a good time to get in on these options. The security's Schaeffer's Volatility Scorecard (SVS) sits at a high 95 out of 100, meaning Etsy stock has exceeded option traders' volatility expectations during the past year.

Meanwhile, short interest makes up 7% of the stock's available float, leaving plenty of short covering potential. In other words, it would take over three days to buy back these bearish bets, at the security's average pace of trading. 

 

 

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