Adobe Stock Pressured by Looming DOJ Challenge

ADBE puts have been all the rage lately

Deputy Editor
Feb 24, 2023 at 9:08 AM
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According to a Bloomberg report, Adobe Systems Incorporated's (NASDAQ:ADBE) $20 billion acquisition of Figma will be blocked by the U.S. Justice Department. Citing an unnamed source, Bloomberg revealed that the case is expected to be filed as soon as next month, as competition authorities ramp up their efforts to crack down on large companies buying rising competitors. 

Adobe stock is trading 4.9% lower ahead of the bell, looking to open at $330.15 -- its lowest level since Jan 6. The equity's 200-day moving average is now acting as pressure, after moving overhead last Friday. Coming into today, ADBE was up 3.1% year-to-date, though today's negative price action is threatening that fractional lead.

Over the last few months, puts have been particularly popular. At the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), Adobe stock sports a 50-day put/call volume ratio of 1.21 that sits in the 95th percentile of readings from the past 12 months.

Echoing this, the security's Schaeffer's put/call open interest ratio (SOIR) of 1.12 ranks higher than 91% of annual readings. In other words, short-term options traders have not been more put-biased in the past year.

Now could be a good time to weigh in on the stock's next move with options, too, as it sports attractively priced premiums at the moment. This is per ADBE's Schaeffer's Volatility Index (SVI) of 41%, which sits in the relatively low 26th percentile of its annual range. What's more, Adobe stock tends to outperform said expectations, based on its Schaeffer's Volatility Scorecard (SVS) rank of 75 -- out of a possible 100.

 

 

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