Coinbase Global Stock Plunges After SEC Lawsuit

Overall options volume is running at eight times the intraday average

Digital Content Manager
Jun 6, 2023 at 10:38 AM
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The U.S. Securities and Exchange Commission (SEC) is taking aim at the crypto sector. The regulator is suing cryptocurrency exchange Coinbase Global Inc (NASDAQ:COIN) for allegedly operating illegally without registration, just a day after filing a lawsuit against Binance. In its complaint, the SEC said Coinbase has made billions of dollar since 2019 while evading disclosure requirements that protect investors.

The equity is off 15.5% at $49.61 at last check -- its lowest trading level since January. COIN also breached a floor at the $56 earlier, which had been supportive for the past month, and is on track for its worst single-day percentage drop since July. Year-over-year, the shares are down 30%.

The brokerage bunch leans bearish toward the security, with 13 of the 22 analysts in coverage calling it a tepid "hold" or worse. Plus, short interest is up 2.6% in the last two reporting periods, and the 37.33 million shares sold short make up 20.9% of the stock's available float.

Overall options volume is already running at eight times the intraday average, with 96,000 calls and 145,000 puts exchanged. The weekly 6/9 40-strike put is the most popular by far, with new positions opening there. 

Short-term options traders have been more bearish than usual. This is per Coinbase stock's Schaeffer's put/call open interest ratio (SOIR) of 1.50, which ranks in the 81st percentile of readings from the past year. 

 

 

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