Options Check-Up: Groupon Inc, LinkedIn Corp, and Sprint Corporation

Analyzing recent option activity on GRPN, LNKD, and S

by Digital Content Group

Published on Dec 10, 2014 at 7:56 AM
Updated on Jun 24, 2020 at 10:16 AM

Among the stocks attracting attention from options traders lately are daily deals site Groupon Inc (NASDAQ:GRPN), professional networking platform LinkedIn Corp (NYSE:LNKD), and telecom issue Sprint Corporation (NYSE:S). Below, we'll break down how option buyers are positioning themselves, and how much speculators are willing to pay for their bets on GRPN, LNKD, and S.

  • With yesterday's 3.6% gain to close at $7.30, GRPN has now added 27.6% since its mid-October low of $5.72. Sentiment in the equity's options pits remains bearish, however. Groupon Inc's 50-day International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) put/call volume ratio of 0.31 ranks in the 69th percentile of its annual range. If GRPN can continue its recent ascent, a capitulation among bearish traders could provide an added boost. The security's near-term options are currently inexpensive, on a volatility basis, according to its Schaeffer's Volatility Index (SV) of 48%, which ranks in its 12th annual percentile.

  • LNKD has captured the attention of options bears the past several weeks. At the ISE, CBOE, and PHLX, the stock's 50-day put/call volume ratio of 1.00 finds itself in its 86th annual percentile. This shouldn't come as a huge surprise, considering LinkedIn Corp has lost over 9% year-over-year, despite adding 1.7% yesterday to land at $215.47. From a volatility perspective, LNKD's short-term options can be had at a bargain price, per its SVI of 32% -- in the 14th percentile of its annual range.

  • It's been a horrendous year for S, which yesterday touched a record low of $4.53, before closing at $4.57, a loss of 3.8%. The stock is now down 57.5% year-to-date, but speculators are betting on a rebound. Options traders have bought to open 10.57 calls for every put at the ISE, CBOE, and PHLX during the past two weeks. What's more, this ratio lands in the 84th percentile of its annual range. Sprint Corporation's short-term options are relatively cheap on a volatility basis, according to its SVI of 51%, which arrives in the 35th percentile of its annual range.


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