Bulls Pounce as TASER International, Inc. (TASR) Hits New High

TASER International, Inc. call volume has soared to eight times the intraday average

by Karee Venema

Published on Dec 2, 2014 at 10:41 AM
Updated on Jun 24, 2020 at 10:16 AM

TASER International, Inc. (NASDAQ:TASR) rallied to a fresh 10-year peak of $24.44 earlier, following reports the Obama administration will increase federal funding to law enforcement agencies to improve training and oversight -- which includes outfitting officers with body cameras. Today's notable milestone isn't enough to satiate option traders, who are calling for a move to higher highs over the long term.

Taking a quick step back, calls are trading at eight times what's typically seen at this point in the day, and are outpacing puts by a roughly 9-to-1 margin. Most active is TASR's June 23 call, where the majority of the 1,976 contracts traded have done so at the ask price, hinting at buyer-driven activity. Volume outstrips open interest at this in-the-money strike, making it safe to assume new positions are being initiated.

Based on the volume-weighted average price (VWAP) of $3.73, breakeven at expiration for today's call buyers is $26.73 (strike plus VWAP) -- territory not charted by TASR since January 2005. Gains will accumulate north of here, while losses are limited to the initial premium paid, should the stock settle south of the strike at June options expiration.

From a wider sentiment perspective, today's accelerated call buying is just business as usual toward a stock that's more than doubled in value since hitting its July 17 annual low of $10.46 to trade at $24.17. At the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), the equity's 50-day call/put volume ratio of 9.89 ranks in the bullishly skewed 70th annual percentile. With nearly 18% of TASER International, Inc.'s (NASDAQ:TASR) float sold short, though, a portion of this activity -- particularly at out-of-the-money strikes -- could be a result of shorts hedging against any additional upside.


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