Not Everyone Has Given Up On American Express Company (AXP)

American Express Company (AXP) option volume is at nine times the normal rate

by

Published on Feb 13, 2015 at 11:13 AM
Updated on Apr 20, 2015 at 5:32 PM

American Express Company (NYSE:AXP) got whacked yesterday, dropping 6.4% after announcing it will end its domestic credit card partnership with Costco Wholesale Corporation (NASDAQ:COST) next year. Today, the shares continue to struggle, last seen 3.1% lower at $78, after earlier touching an annual low of $77.72. Elsewhere, in AXP's options pits, contracts are crossing the tape at nine time the expected mid-morning pace.

Buy-to-open activity has been detected at the February 78 call, as these traders are expecting the stock to gain ground above $78 before the close next Friday, when front-month options expire. To see a profit on their bets, the speculators will need AXP to reach $79.41 (strike plus volume-weighted average price of $1.41).

In the past two weeks, AXP's options pits have been dominated by call buying. At the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), the security's 10-day call/put volume ratio of 3.04 is only 2 percentage points from an annual high, meaning traders have shown a greater-than-usual appetite for calls over puts.

Analysts remain skeptical of American Express Company (NYSE:AXP) -- not surprising, given its 12.4% year-over-year decline. Of the 20 brokerage firms covering the shares, 12 rate them a "hold" or worse. What's more, AXP today was hit by price-target cuts from several brokerage firms, including RBC, which sliced its target by $5 to $74 and reiterated an "underperform" rating.


A Schaeffer's exclusive!

The Expert's Guide

Access your FREE trading earning announcements before it's too late!


 
 

Partnercenter


NEW! Explore Schaeffer’s Partners' deals and get connected to top online brokerages with deals tailored exclusively for our readers.  Get answers to your questions regarding transfer fees, commission rates, programs and available discounts related to online trading services.

MORE | MARKETstories


Look Who's Going Bankrupt Next in America
Porter Stansberry is making a concerning prediction.
CE Stock Heading into Bullish Month
Celanese stock is coming off a free fall from its all-time-high in late 2019
HD Stock Sinks on Bear Notes, In-Store Changes
Home Depot stock received price target cuts after sharing in-store changes
Look Who's Going Bankrupt Next in America
Porter Stansberry is making a concerning prediction.