Calls In Play as Cree, Inc. (CREE) Rallies

Cree, Inc. call volume has soared to nine times the intraday average

Dec 23, 2014 at 11:01 AM
facebook twitter linkedin

Cree, Inc. (NASDAQ:CREE) is up 2.4% this morning to trade at $32.90, and options traders are responding in kind. In fact, calls are crossing the tape at a rate nine times the intraday average, and are outpacing puts by a more than 3-to-1 margin. Short-term contracts are in high demand, too, as evidenced by CREE's 30-day at-the-money implied volatility, which has jumped 6.8% to 51.9% -- in the 82nd percentile of its annual range.

Drilling down, the equity's January 2015 33-strike call has seen the most action, and according to Trade-Alert, a number of these positions were bought to open. Amid today's pop, delta on the call has risen to 0.51 from 0.41 at last night's close, implying a greater probability the option will be in the money at the close on Friday, Jan. 16 -- when front-month options expire.

From a wider sentiment perspective, today's accelerated call activity marks a change of pace in CREE's options pits. At the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), the equity's 10-day put/call volume ratio of 2.69 ranks just 3 percentage points from an annual bearish peak.

Echoing this is the security's Schaeffer's put/call open interest ratio (SOIR) of 0.83, which ranks higher than 92% of similar readings taken in the past year. Simply stated, short-term speculators have rarely been as put-heavy as they are now.

Looking at the charts, the withstanding trend toward puts aligns more accurately with CREE's technical showing. Year-to-date, the equity has surrendered more than 47% of its value. More recently, Cree, Inc. (NASDAQ:CREE) has underperformed the broader S&P 500 Index (SPX) by north of 26 percentage points over the past 60 sessions.


Minimize Risk While Maximizing Profits

There is no options strategy like this one, which consistently minimizes risk while maintaining maximum profits. Perfect for traders looking for ways to control risk, reduce losses, and increase the likelihood of success when trading calls and puts. The Schaeffer’s team has over 41 years of options trading success targeting +100% gains on every trade. Rest assured your losses are effectively limited to your initial cost at the time of making your move! Don't waste another second... join us right now before the next trade is released! 


300x250 - Banner 3 - v1