Call Buyers Flock to Surging E2open, Inc. (EOPN)

E2open Inc (EOPN) is rallying on a new poison pill provision

Digital Content Group
Jan 16, 2015 at 1:57 PM
facebook twitter linkedin

Cloud concern E2open Inc (NASDAQ:EOPN) has surged more than 32% this afternoon to trade at $7.23, buoyed by poison pill news. Bullish options traders are getting in on the action, as calls are changing hands at 72 times the expected intraday rate.

Digging deeper, EOPN's soon-to-be front-month February 7.50 call is in focus. Nearly 1,500 contracts are on the tape here, most of which appear to have been bought to open. In other words, these optimistic speculators anticipate the stock will rally past $7.50 by the close on Friday, Feb. 20, when the options expire.

It wasn't too long ago that EOPN was trading comfortably above that level. In fact, the shares were in the $8-$10 range from mid-December onward, until a post-earnings bear gap -- and subsequent round of bearish brokerage notes -- on Jan. 9.

One group that's taken notice of E2open Inc's (NASDAQ:EOPN) technical missteps (today notwithstanding) is short sellers. Roughly 15% of the stock's float is sold short, which would take nearly 13 days to buy back, at typical daily trading volumes.


Special Offers from Schaeffer's Trading Partners