Calls Hot as TASER International, Inc. (TASR) Soars

TASER International, Inc. calls are trading at eight times the intraday average

by Karee Venema

Published on Nov 26, 2014 at 12:13 PM
Updated on Apr 20, 2015 at 5:32 PM

TASER International, Inc. (NASDAQ:TASR) is up 6.6% -- and earlier hit a nine-year high of $22.35 -- after North Carolina's Winston-Salem Police Department upped its order with the company. Option traders are responding in kind, with calls trading at eight times the intraday average, and outpacing puts by a 9-to-1 ratio.

Most active is the equity's December 23 call, where 2,627 contracts are on the tape. The majority of these have changed hands at the ask price, implied volatility is up 2 percentage points, and volume outstrips open interest, making it safe to assume new positions are being purchased.

The volume-weighted average price (VWAP) for the calls is $0.55, making at-expiration breakeven $23.55 (strike plus VWAP) -- territory not charted by TASR since January 2005. Gains will accrue north of here, while losses are capped at the initial premium paid, should the stock settle south of the strike at expiration.

However, with a significant portion of the equity's float dedicated to short interest, the activity at this out-of-the-money strike could be at the hands of shorts hedging against any additional upside. Regardless of the reason, premium on the equity's front-month options is relatively inexpensive at the moment. Specifically, TASER International, Inc.'s (NASDAQ:TASR) Schaeffer's Volatility Index (SVI) of 47% ranks lower than 70% of similar readings taken in the past year.


A Schaeffer's exclusive

6 Sectors for Summer

Access your FREE insider report before it's too late!


  
 

Partnercenter


NEW! Explore Schaeffer’s Partners' deals and get connected to top online brokerages with deals tailored exclusively for our readers.  Get answers to your questions regarding transfer fees, commission rates, programs and available discounts related to online trading services.

MORE | MARKETstories


3 Million to Lose Jobs – and Not Because of Coronavirus?
A terrifying new trend can make you a millionaire or destroy your financial future.
Wall Street Reclaims Two Key Trendlines This Week
U.S.-China tensions and dire economic data still weigh, though
Dell Stock Jumps on Upbeat First Quarter
DELL announced an upbeat first-quarter report
Research Exposes Shortcut to Stock Market Wins
A simple way to stop picking losers, and start cashing in like Wall Street's elite.