Short-Term Bulls Target Yahoo! Inc. (YHOO)

Options traders look for Yahoo! Inc. (YHOO) to topple $48 once again

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Published on Jan 16, 2015 at 11:43 AM
Updated on Apr 20, 2015 at 5:32 PM

Yahoo! Inc. (NASDAQ:YHOO) is up 0.2% today at $46.31. Speculators have in turn focused their attention on calls, which are trading at nearly twice the typical intraday rate.

Jumping right in, eight of YHOO's 10 most popular strikes are calls, with possible buy-to-open activity at the weekly 1/23 48 strike. By buying to open these contracts, speculators expect YHOO to eclipse the $48 level by next Friday's close, when the weekly contracts expire. This territory is not unfamiliar to the stock, as it traded above $48 for over two months straight prior to this week's broad-market pullback.

YHOO options traders' recent focus on calls represents a change of pace. For instance, the stock's Schaeffer's put/call open interest ratio (SOIR) of 0.58 ranks higher than three-quarters of all similar readings taken in the past year. Simply put, near-term speculators are more put-focused than normal.

From a broader perspective, Yahoo! Inc. (NASDAQ:YHOO) has been strong on the charts, adding 15.8% year-over-year, and outperforming the S&P 500 Index (SPX) by 12 percentage points in the last three months. The stock is now testing a foothold atop its 20-week moving average, which has served as support since late July.

Weekly Chart of YHOO Since July 2014 with 20-Week Moving Average

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