Speculators Eye GoPro Inc (GPRO) Amid Lockup-Induced Pop

GoPro Inc's first lockup period expired today

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Published on Dec 23, 2014 at 2:45 PM
Updated on Apr 20, 2015 at 5:32 PM

GoPro Inc (NASDAQ:GPRO) was up by as much as 6.9% today -- amid the expiration of the company's first lockup period -- and was last seen 2.9% above breakeven at $59.59. Meanwhile, options volume is running at a 33% mark-up to the typical intraday rate, and the stock's 30-day at-the-money implied volatility has edged 1.5% higher to 72.7%, signaling elevated demand for short-term strikes.

Looking more closely, speculators are taking different paths toward GPRO. On the one hand, it appears option bulls are buying to open the January 2015 60-strike call, hoping the shares will topple the round-number mark by the close on Friday, Jan. 16, when the newly front-month options expire. On the other, shorter-term speculators are initiating long positions at the weekly 12/26 59-strike put, anticipating the stock will breach $59 by this Friday's close, when the series ceases trading.

Taking a step back, over the last month, option buyers have targeted calls over puts by a modest margin. Specifically, GPRO's 20-day International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) call/put volume ratio checks in at 1.22.

On the charts, it's been a volatile past few months for GoPro Inc (NASDAQ:GPRO), which ran to an all-time high of $98.47 in early October, before pulling back in recent months. However, today's gains have the stock primed to close atop its 10-day moving average for the first time since late November.

Daily Chart of GPRO since September 2014 with 10-Day Moving Average


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