GoPro, Inc. (GPRO) Option Traders Eye a $50 Ceiling

GoPro Inc (GPRO) options are hot amid the stock's descent

by Andrea Kramer

Published on Feb 18, 2015 at 1:03 PM
Updated on Jun 24, 2020 at 10:16 AM

GoPro Inc (NASDAQ:GPRO) is down 7.8% at $46.96, on what some speculate is post-lockup selling. Whatever the catalyst, GPRO options are crossing the tape at twice the average midday clip, with speculators taking a shine to options expiring at the end of this week.

Nine of the 10 most active GPRO options expire at Friday's close. Digging deeper, it looks like some traders are employing both puts and calls to place neutral-to-bearish bets on the stock's short-term trajectory.

"Vanilla" bears are buying to open the February 42 and 50 puts. Buyers of the former are hoping GPRO breaches $42 -- in territory not charted since August -- by Friday's close, when the options expire. Buyers of the latter are less aggressive, and hope GPRO extends its retreat south of $50 through the end of the week.

Meanwhile, data from the International Securities Exchange (ISE) suggests some speculators are selling to open the February 50 call. The traders will pocket the entire net credit -- which represents the maximum potential reward -- as long as GPRO stays beneath the mid-century mark through Friday's close.

GoPro Inc (NASDAQ:GPRO) finished yesterday atop $50 for the first time since Feb. 5, thanks in part to an upbeat analyst note. That feat was obviously short-lived, and today's retreat has GPRO sitting on a year-to-date loss of 25.8%. Still, today's skeptically skewed options activity marks a change of pace for the equity. The stock's 10-day call/put volume ratio on the ISE, Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) sits at 1.74, indicating long calls have been the options of choice during the past two weeks.


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