Groupon, Inc. (GRPN) Rally Riles Up Option Bulls

Groupon Inc (GRPN) has seen extreme levels of call buying recently

Digital Content Group
Jan 22, 2015 at 1:31 PM
facebook X logo linkedin

Groupon Inc (NASDAQ:GRPN) is nearly 4% higher at $7.44, despite the lack of a clear catalyst. Not surprisingly, calls are running at nearly 1.8 times the expected intraday clip, and short-term contracts are in demand, per the stock's 30-day at-the-money implied volatility, which has popped 3.8% to 78%.

Along those lines, GRPN's February 7.50 call is seeing the most action, with more than 4,100 contracts on the tape. Based on data from Trade-Alert, a number of these positions are being bought to open. In other words, the traders expect the stock will extend its run higher, and finish atop $7.50 by the close on Friday, Feb. 20 -- when the front-month options expire.

Call buying has been a popular strategy in recent weeks. During the last 10 days at the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), GRPN has racked up a call/put volume ratio of 20.54 -- higher than any other reading from the previous year. However, with nearly 19% of the stock's float sold short, it's possible some of these bets were initiated by short sellers seeking an upside hedge.

While Groupon Inc (NASDAQ:GRPN) has had a nice run today, it remains a long-term technical laggard. On a year-over-year basis, the security has tumbled 30%.

Daily Chart of GRPN since January 2014


Unlock Weekend Profits with Chris Prybal's Favorite Strategy Up +487.5% in 2024

With the markets going left, right, and sideways, you need to have a plan now more than ever. 

Expert Trader Chris Prybal is no stranger to volatility, and has mastered finding big stock rallies while other traders aren't looking over the weekend. Rallies that produced gains like +207% on RTX calls, +236% on MARA calls, and +238% on NET calls.

A few simple moves on Sunday at 7pm could be the “Secret Sauce” your portfolio needs to not just stay afloat, but make unprecedented gains in this turbulent market.

Don’t sit on the sidelines, beat the market with Chris Prybal's strategy. Join him now!




Rainmaker Ads CGI