Calls Hot as FireEye, Inc. (FEYE) Soars

FireEye Inc (FEYE) is bucking the broad-market trend lower today

by Karee Venema

Published on Jan 30, 2015 at 1:37 PM
Updated on Jun 24, 2020 at 10:16 AM

Amid reports indicating the Senate may fast-track a cybersecurity bill, shares of FireEye Inc (NASDAQ:FEYE) have managed to buck the broad-market trend lower today. At last check, the stock was up 5.3% to trade at $34.48, and options traders are gambling on FEYE to extend this momentum over the next several weeks.

Taking a quick step back, calls are trading at 1.8 times the average intraday rate, and are outpacing puts by a more than 5-to-1 margin. Most active is the February 32.50 call, where it appears new positions are being purchased. Thanks to today's surge, delta on the call has jumped to 0.66 from 0.55 at last night's close, reflecting a greater probability the option will expire in the money at the close on Friday, Feb. 20.

Today's affinity for short-term calls over puts marks a change of pace in the equity's options pits. In fact, FEYE's Schaeffer's put/call open interest ratio (SOIR) of 0.93 ranks in the 96th annual percentile. Simply stated, near-term traders have been more put-focused just 4% of the time within the past year. Should the security continue to rally, an unwinding of the hedges related to these put positions could create tailwinds.

Technically speaking, FireEye Inc (NASDAQ:FEYE) has started the year out on a strong note, up 9.2%. What's more, the equity has recently found a foothold atop its 32-week moving average -- a trendline that served as resistance in November, but now appears to have switched to a more supportive role.


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