New High Inspires Short-Term Visa Inc (V) Bulls

Visa Inc touched an all-time high on Wednesday

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Published on Dec 26, 2014 at 9:46 AM
Updated on Apr 20, 2015 at 5:32 PM

Visa Inc (NYSE:V) hit a record high of $268.85 on Wednesday, and options traders responded by rolling the dice on additional upside. Meanwhile, the stock's 30-day at-the-money implied volatility spiked 9.3% to 17.7%, signaling elevated demand for short-term contracts.

Digging deeper, speculators bought to open the weekly 12/26 270-strike call, which was V's most active option. In other words, these eleventh-hour bettors anticipate the shares will settle above $270 at tonight's close, when the series expires. This mark is just a chip-shot away from the stock's current price of $267.63.

Longer term, it's been an outstanding year for V, which has added more than 20% in 2014. On top of that, the equity has outperformed the broader S&P 500 Index (SPX) by 19.1 percentage points over the last three months.

At the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), traders have bought to open 1.13 Visa Inc (NYSE:V) puts for every call over the last two weeks. The resultant put/call volume ratio ranks in the bearishly skewed 87th annual percentile -- though some of these put buyers may be shareholders hedging against any unexpected downside.


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