Short-Term Bulls Target Priceline Group Inc (PCLN)

The weekly 11/28 series was popular in Priceline Group Inc's options pits yesterday

by Digital Content Group

Published on Nov 26, 2014 at 9:37 AM
Updated on Jun 24, 2020 at 10:16 AM

Priceline Group Inc (NASDAQ:PCLN) gained 1.6% yesterday to settle at $1,179.17, bringing the shares above their year-to-date breakeven mark. Meanwhile, the stock's 30-day at-the-money implied volatility (IV) spiked 4.1% to 20.1%, suggesting short-term contracts were once again in demand.

A closer look reveals this is true. In fact, each of PCLN's 10 most active options expires at this Friday's close. In the lead was the weekly 11/28 1,170-strike call, where 1,713 contracts changed hands -- the majority at the ask price, pointing to buyer-driven activity. What's more, IV edged slightly higher, and open interest rose overnight, suggesting newly bought bullish bets.

Breakeven for the buyers at Friday's close is $1,177.66, or the strike plus the volume-weighted average price of $7.66. In other words, yesterday's traders are already staring at potential paper profits. Gains are theoretically unlimited north of breakeven, while losses are capped at the initial premium paid, should Priceline Group Inc (NASDAQ:PCLN) retreat below the strike by week's end.


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