King Digital Entertainment plc (KING) Traders Predict Short-Term Churn

Call sellers are skeptical of King Digital Entertainment PLC (KING)

Digital Content Group
Jan 2, 2015 at 2:36 PM
facebook twitter linkedin


King Digital Entertainment PLC (NYSE:KING) has been wallowing in the red most of the day, and was off by as much as 4.7% this morning. At last check, however, the shares had pared a portion of their losses, down a more modest 1.6% at $15.11. Meanwhile, short-term options traders have been busy, as the stock's 30-day at-the-money implied volatility has popped 3.8% to 74.9%.

Digging deeper, data from the International Securities Exchange (ISE) indicates sell-to-open activity at the January 2015 16.54-strike call. In other words, these traders are rolling the dice on a near-term ceiling for KING -- expecting the shares to remain below $16.54 through the close on Friday, Jan. 16, when front-month options expire.

Longer term, KING has been a technical laggard. The stock has shed more than one-quarter of its value of its value since going public in late March, and is struggling to fill a mid-August bear gap, before which the shares were trading north of $18.

Options traders aren't the only ones displaying skepticism toward King Digital Entertainment PLC (NYSE:KING). Seven of 11 covering analysts rate the shares a "hold," and 19.4% of the equity's float is sold short -- which represents nearly eight sessions' worth of pent-up buying power, at average daily trading volumes.

 

If you are not making money with options, you aren’t buying options like this…

There is no options strategy that more perfectly approaches trading the fastest moving and most volatile stocks available in the marketplace than this one. In fact, there is no strategy that better utilizes put options for optimal returns and a real trading edge over other traders in the exact same market. New options traders fail out at an incredible rate without proper trade research, execution timing, and option picking. Capitalize on Schaeffer’s 100+ years of options trading excellence with the most coveted product launch in company history. Don't waste another second... join us right now before the next round of trades are released!

Schaeffer's Investment Research Master Portfolio Trial
 


 


 
Special Offers from Schaeffer's Trading Partners