Options Traders Change Course on Boyd Gaming Corporation (BYD)

Bullish traders target the $13 level for Boyd Gaming Corporation

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Published on Dec 30, 2014 at 3:28 PM
Updated on Apr 20, 2015 at 5:09 PM

Boyd Gaming Corporation (NYSE:BYD) has jumped over 7% today to trade at $13.03. As a result, activity in the stock's options pits has picked up considerably, with intraday volume at 53 times normal trading levels. Also, BYD's 30-day at-the-money implied volatility is up 13.2% at 44.2%, showing short-term options are in high demand.

Speculators are taking a mostly bullish stance today, with calls outpacing puts by a 10-to-1 margin. The most popular strike is the February 13 call, where roughly 19,400 contracts have been exchanged -- over 19 times more than any other strike. The majority of these calls crossed at the ask price, hinting at buy-to-open activity.

These speculators expect the security to top the $13 mark -- a level not touched since April before today -- by the close on Friday, Feb. 20, when the back-month series expires.

This interest in BYD calls goes against what's previously been seen in the stock's options pits. Per its Schaeffer's put/call open interest ratio (SOIR) of 1.03, in the 98th annual percentile, short-term speculators have only been more put-skewed 2% of the time in the past year.

Options traders haven't been the only ones unsure of Boyd Gaming Corporation (NYSE:BYD). Of the 10 analysts covering the security, eight rate it a "hold," and one rates it a "sell." However, today's price increase puts BYD even further above its consensus 12-month price target, which sits at $10.44.


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