Option Activity Pops as GoPro, Inc. (GPRO) Gets Smacked By Apple Inc.

GoPro Inc (GPRO) options are trading at a faster-than-usual clip today

Jan 13, 2015 at 1:25 PM
facebook twitter linkedin


GoPro Inc (NASDAQ:GPRO) has plunged 10% today -- and found a place on the short-sale restricted (SSR) list -- on news that Apple Inc. (NASDAQ:AAPL) has been granted a patent for a camera system similar to the one GPRO develops. In GPRO's options pits, volume is trading at 1.8 times the average intraday pace, and short-term contracts are in demand. Specifically, all 10 of GPRO's most active options expire in the next six weeks.

The equity's January 2015 60-strike put has seen the most action, but according to data from the International Securities Exchange (ISE), a number of these positions are being sold to close ahead of Friday's expiration. Looking down the list, GPRO's January 2015 55-strike call has received notable attention, with signs suggesting a mix of buy- and sell-to-open activity.

By buying to open the calls, traders expect GPRO to bounce back above $55 by week's end -- when front-month options expire. Meanwhile, those selling to open the calls are betting on the level to hold as a short-term ceiling.

From a wider sentiment perspective, option bulls have been active on GoPro Inc (NASDAQ:GPRO) in recent weeks, despite the stock being down 48% from its Oct. 7 all-time high of $98.47 to trade at $51.07. At the ISE, Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), speculators have bought to open 1.48 calls for every put during the past 10 sessions. With nearly 30% of the equity's float sold short, though, a portion of this call buying may be a result of shorts hedging against any unexpected upside.

 

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