![]()
TiVo Inc.'s (TIVO) May 12 call was heavily targeted on Wednesday
TiVo Inc. (NASDAQ:TIVO) ended Wednesday 0.7% lower at $10.51, after earlier touching a two-year low of $10.29. Meanwhile, call traders flooded the stock's options pits, where the contracts crossed at five times the average daily rate.
The majority of the call volume transpired at TIVO's May 12 strike. Data suggests a number of these positions were bought to open, as long-term speculators wagered on the shares to rebound past $12 by May options expiration.
Looking more closely at the charts, TIVO has tumbled 19.3% on a year-over-year basis. What's more, the stock hasn't explored the north side of $12 since late December. As such, delta on the out-of-the-money call is just 0.27, meaning the market's giving the option a roughly 1-in-4 chance of being in the money at expiration.
Surprisingly, option bulls have kept the faith in TiVo Inc. (NASDAQ:TIVO), despite its spotty technical track record. The security's 10-day call/put volume ratio on the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) is 33.40 -- which outstrips 88% of all other readings taken in the last year. With short interest accounting for 9.2% of the stock's available float, a portion of this call volume may be a result of shorts hedging against any unexpected upside. As it turns out, TIVO's 14-day Relative Strength Index (RSI) of 21 is sitting deeply in oversold territory, suggesting a near-term bounce may be in the cards.