Options Radar: SodaStream International Ltd, DryShips, and NetSuite

Reviewing notable options activity on SodaStream International Ltd, DryShips Inc., and NetSuite Inc

Oct 24, 2014 at 1:28 PM
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Three stocks seeing notable options activity today are at-home beverage maker SodaStream International Ltd (NASDAQ:SODA), shipping issue DryShips Inc. (NASDAQ:DRYS), and cloud concern NetSuite Inc (NYSE:N). Here's a look at how speculators are placing their bets on SODA, DRYS, and N.

  • After spending most of the morning churning around breakeven, SodaStream International Ltd (NASDAQ:SODA) took off shortly before lunchtime, and was last seen 15.9% higher at $24.55, following reports of a partnership with PepsiCo, Inc. (NYSE:PEP). Against this backdrop, call players are once again flooding SODA's options pits, with volume running at 10 times the average intraday pace, and based on the equity's 30-day at-the-money (ATM) implied volatility (IV) -- which is up 18% to 74.5% -- short-term contracts are in high demand. Drilling down, buy-to-open activity has been detected at SODA's November 25 call, as traders gamble on an extended rise over the next four weeks -- a time frame that encompasses the company's third-quarter earnings report, slated for release ahead of next Wednesday's open.

  • Having a decidedly different day is DryShips Inc. (NASDAQ:DRYS), which has plunged 22% to churn near $1.57 -- music to the ears of option bears -- after the company priced its new share offering at a 30% discount to last night's closing price of $2.00. Today's bearish gap -- which landed the stock on the short-sale restricted (SSR) list -- only highlights DRYS' longer-term technical troubles, with the shares down 45% year-over-year. However, during that time, the stock has never traded below the $1 mark, which may be why one speculator today bet big on this level to hold as a floor over the next 15 months. Specifically, a massive block of 19,360 January 2016 1-strike puts was sold to open earlier for $0.20 apiece, resulting in an initial credit of $387,200 (number of contracts * premium collected * 100 shares per contract). This also represents the maximum reward on the play, should DRYS maintain its foothold atop the dollar mark through January 2016 options expiration.

  • NetSuite Inc (NYSE:N), meanwhile, has rallied 12.4% to $104.45 -- and moved back into the black on a year-to-date basis -- after offering up a better-than-expected quarterly earnings report and an upbeat outlook for the current quarter. What's more, the stock received no fewer than nine price-target hikes in the wake of its results, including one from Credit Suisse to $125 from $115, with the brokerage firm underscoring its "outperform" rating. On the options front, overall volume has soared to seven times what's typically seen at this point in the day, and following last night's scheduled event, the equity's 30-day ATM IV has plunged 23.8% to 33.4%. New positions are being initiated at the stock's November 115 call and November 90 put, but it appears both may be seeing sell-to-open activity.

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