Options Check-Up: Alcatel Lucent, BlackBerry Limited, and Yelp Inc.

Analyzing recent option activity on Alcatel Lucent SA (ADR) (ALU), BlackBerry Ltd (BBRY), and Yelp Inc (YELP)

Feb 5, 2015 at 8:13 AM
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Among the stocks attracting attention from options traders lately are France-based telecom provider Alcatel Lucent SA (ADR) (NYSE:ALU), Canadian wireless issue BlackBerry Ltd (NASDAQ:BBRY), and restaurant review website Yelp Inc (NYSE:YELP). Below, we'll break down how options traders are positioning themselves, and how much speculators are willing to pay for their bets on ALU, BBRY, and YELP.

  • ALU, which will release its latest earnings results after the open on Friday, added 0.8% yesterday to reach $3.61. However, the stock has lost over 13% on a year-over-year basis. Bullish sentiment in the stock's options pits is ramping up, per its 10-day International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) call/put volume ratio of 76.06, which is higher than 89% of all other annual readings. What's more, traders are paying historically cheap prices for their near-term bets on Alcatel Lucent SA (ADR), with its Schaeffer's Volatility Index (SVI) of 53% sitting lower than 80% of all similar readings taken over the past year.

  • Shares of rumored takeover target BBRY are up about 41% since hitting an annual low of $7.01 on April 14, despite a 0.5% loss yesterday, to rest at $9.88. Sentiment in BlackBerry Ltd's options pits is currently bearish, with its 10-day ISE/CBOE/PHLX put/call volume ratio of 0.55 sitting in the 90th percentile of its annual range. Likewise, the brokerage bunch is also pessimistic about BBRY's future, with 83% of covering analysts doling out "hold" or worse ratings on the equity. Short-term options for BBRY are pricing in tepid volatility expectations, as its SVI of 54% sits in the 33rd percentile of all similar readings taken annually.

  • YELP gained 1.7% yesterday to hit $56.74, but is still down 24.6% year-over-year. Ahead of tonight's earnings release, sentiment in Yelp Inc's options pits is nearing a bullish peak, with the stock's 50-day ISE/CBOE/PHLX call/put volume ratio of 2.30 sitting 3 percentage points away from the highest reading taken over the past year. Speculators are paying middling prices for their bets on YELP, with its SVI of 79% sitting in the 61st annual percentile.
 

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