Conn's, Inc. (CONN) Surge Has Options Bulls Piling On

CONN'S, Inc. (CONN) is higher today on an upgrade at Stifel

Feb 9, 2015 at 10:45 AM
facebook twitter linkedin

CONN'S, Inc. (NASDAQ:CONN) is bucking the broad-market trend lower today -- up 13.7% at $25.56 -- after Stifel boosted its outlook on the shares to "buy" from "hold." Options traders are responding in kind, and are scooping up calls at a rate nearly four times the intraday average. Short-term contracts are in high demand, too, as evidenced by CONN's 30-day at-the-money implied volatility, which is 15.3% higher at 78.7%.

Drilling down, buy-to-open activity has been detected at the stock's March 24 and 26 calls, as traders eye a continued rally over the next six weeks. Amid today's surge, delta on the lower-strike call has jumped to 0.66 from 0.41 at last Friday's close, while delta on the higher-strike call is up to 0.51 from 0.30, signifying a greater probability the calls will be in the money at expiration.

Today's accelerated call activity marks a change of pace in the equity's options pits. At the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), the stock's 50-day put/call volume ratio of 1.08 ranks in the bearishly skewed 88th annual percentile. Plus, CONN's Schaeffer's put/call open interest ratio (SOIR) of 1.28 sits higher than 94% of similar readings taken in the past 52 weeks, meaning short-term speculators have rarely been as put-skewed as they are now.

On the charts, CONN'S, Inc. (NASDAQ:CONN) has rallied 62% this month, due in large part to last week's well-received same-store sales report. However, the equity remains a long-term laggard, and on a year-over-year basis, is down 56%.


If you are not making money with options, you aren’t buying options like this…

There is no options strategy that more perfectly approaches trading the fastest moving and most volatile stocks available in the marketplace than this one. In fact, there is no strategy that better utilizes put options for optimal returns and a real trading edge over other traders in the exact same market. New options traders fail out at an incredible rate without proper trade research, execution timing, and option picking. Capitalize on Schaeffer’s 100+ years of options trading excellence with the most coveted product launch in company history. Don't waste another second... join us right now before the next round of trades are released!

Schaeffer's Investment Research Master Portfolio Trial


Special Offers from Schaeffer's Trading Partners