Groupon, Inc. (GRPN) Bulls Encouraged By Big Payday Rumors

Groupon Inc (GRPN) could receive $1 billion from its Ticket Monster investment

Feb 5, 2015 at 12:01 PM
facebook X logo linkedin

Groupon Inc (NASDAQ:GRPN) has tacked on 1.6% today to linger near $7.42, amid speculation the online coupon concern may be considering selling its majority stake in South Korea's Ticket Monster Inc -- which could result in a roughly $1 billion cash infusion for GRPN. Options traders are taking kindly to the news, with calls outpacing puts by a 13-to-1 margin.

Drilling down, bulls appear to be buying to open the near-the-money weekly 2/6 7.50-strike call, as they roll the dice on more upside through tomorrow's close -- when the weekly series expires. Thanks to today's pop, delta on the call has jumped to 0.40 from 0.28 at last night's close, indicating a greater chance the position will be in the money at expiration.

Widening the sentiment scope reveals options traders have shown a distinct preference for calls over puts in recent months. At the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), GRPN's 50-day call/put volume ratio of 10.06 sits just 5 percentage points from an annual bullish peak. With more than 19% of the stock's float sold short, though, a portion of this call buying could be a result of shorts hedging their bearish bets.

On the charts, GRPN has had a fairly uninspiring start to the year, with the shares off around 10.2%. However, this downward trajectory was recently contained by the equity's 200-day moving average -- a trendline that served as a springboard for Groupon Inc (NASDAQ:GRPN) in mid-December.

Daily Chart of GRPN Since October 2014 With 200-Day Moving Average

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!