GoPro (GPRO) Weekly Calls Active Ahead of CES Appearance

GoPro Inc's (GPRO) weekly 1/9 calls are popular today

Jan 5, 2015 at 2:00 PM
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GoPro Inc (NASDAQ:GPRO) is trading just below the flatline today at $66.77, ahead of the company's highly anticipated appearance at the Consumer Electronics Show tomorrow. In the options pits, calls have a healthy lead over their put counterparts, and according to the equity's 30-day at-the-money implied volatility -- which is up 5.6% at 67.1% -- short-term contracts are in high demand.

Drilling down, the equity's two most active options are the weekly 1/9 68- and 70-strike calls, where the majority of the action appears to be of the buy-to-open kind. By initiating these long calls, speculators expect GPRO to finish north of the respective strikes at this Friday's close, when the weekly series expires.

Widening the sentiment scope reveals today's preference for calls over puts is just more of the same. During the past 10 sessions, speculators at the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) have bought to open 53,298 calls, compared to 36,468 puts, resulting in a call/put volume ratio of 1.46.

While this bullish positioning isn't surprising considering GPRO has more than doubled in value since going public in late June, there could be an ulterior motive to this call-skewed activity. Specifically, short interest jumped 20.8% in the latest reporting period, and now accounts for more than 23% of GoPro Inc's (NASDAQ:GPRO) available float. Simply stated, some of the recent call buying may be at the hands of short sellers hedging against any additional upside.


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