GoPro Inc (GPRO) Rally Sparks a Rush of Call Activity

GoPro Inc calls are trading at nearly three times the intraday average

Nov 18, 2014 at 10:45 AM
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GoPro Inc (NASDAQ:GPRO) has rallied 3.8% this morning to linger near $84.56, following news the company has upped its secondary share offering. Option traders are responding in kind, scooping up GPRO calls at a rate nearly three times the intraday average.

Drilling down, GPRO's November 85 call has seen the most action, with 2,745 contracts on the tape at last check. The majority of these contracts have changed hands at the ask price, and implied volatility has jumped 4.9 percentage points, hinting at the possibility new positions are being purchased. Amid today's surge, delta on the call has jumped to 0.47 from 0.27 at last night's close, indicating an increased probability the option will be in the money at Friday's close, when the front-month contracts expire.

Looking outside of the options pits reveals not everyone is as upbeat toward a stock that's roughly tripled in value since going public in late June, thanks to a number of big moves to the upside. In fact, roughly 73% of analysts covering the shares maintain a "hold" or "strong sell" suggestion, while the consensus 12-month price target of $81.60 stands at a discount to current trading levels. Should GoPro Inc (NASDAQ:GPRO) continue to outperform, a round of upgrades and/or price-target hikes could help propel the shares higher.

 

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