Options Radar: Priceline Group Inc, Transocean LTD, and Michael Kors

Reviewing notable options activity on Priceline Group Inc, Transocean LTD, and Michael Kors Holdings Ltd

by Andrea Kramer

Published on Nov 4, 2014 at 1:04 PM
Updated on Jun 24, 2020 at 10:16 AM

Option traders have taken a shine to online travel issue Priceline Group Inc (NASDAQ:PCLN), oil-and-gas concern Transocean LTD (NYSE:RIG), and upscale apparel provider Michael Kors Holdings Ltd (NYSE:KORS). Here's a look at how speculators have been placing their bets on PCLN, RIG, and KORS.

  • Priceline Group Inc (NASDAQ:PCLN) is wallowing in the red at midday, down 9.3% at $1,087.75, after the firm's fourth-quarter earnings forecast left much to be desired, and Benchmark slashed its price target to $1,400 from $1,550 (but retained its "buy" recommendation). Intraday options volume is running at nearly three times the average pace, and eleventh-hour bears are betting on more downside for PCLN through the end of the week, buying to open the weekly 11/7 1,100-strike put -- the most active contract so far.

  • Transocean LTD (NYSE:RIG) is swooning in step with crude oil futures, down 4.5% at $27.56. In fact, the equity is extending its journey into multi-year-low terrain, touching an intraday nadir of $27.08. Ahead of the company's turn in the earnings spotlight on Thursday afternoon, speculators are scrambling to place short-term bets; the stock's 30-day at-the-money implied volatility (IV) was last seen 16.5% higher at 51.2%. Most popular is the November 26.50 put, where almost all of the contracts have traded near the ask price, IV has popped 6.9 percentage points, and volume outstrips open interest -- collectively pointing to newly bought bearish bets. By purchasing the puts to open, the buyers expect RIG to steepen its slide and breach $26.50 by the close on Friday, Nov. 21, when front-month options expire.

  • Finally, Michael Kors Holdings Ltd (NYSE:KORS) is reeling -- despite reporting stronger-than-expected earnings and being upgraded to "buy" from "hold" (as well as seeing its price target upped to $100 from $80) at Jefferies -- after offering an unimpressive current-quarter outlook and projecting slowing same-store sales. Most recently, the shares were down 7.9% at $71.81. What's more, KORS is now docked on the short-sale restricted (SSR) list, forcing bears to the options pits. Intraday put volume is running at seven times the norm, with fresh positions detected at the weekly 11/14 70-strike put. By purchasing the puts to open, the traders expect KORS to backpedal south of $70 -- which corresponds with the equity's intraday low -- by the close on Friday, Nov. 14, when the options cease trading. Bullish holdouts, on the other hand, are purchasing to open November 70 calls, amid expectations for a post-earnings rebound in the short term.

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