Put Trader Dominates Mobileye NV (MBLY) Options Pits

One Mobileye NV (MBLY) trader initiated a ratio spread

by

Published on Feb 27, 2015 at 1:40 PM
Updated on Apr 20, 2015 at 5:32 PM

Just a day after posting an earnings beat, Mobileye NV (NYSE:MBLY) is following the broader market lower -- down 0.7% this afternoon to trade at $35.56. As such, put volume has ramped up, with the contracts crossing at more than double the usual pace for this point in the session.

Digging deeper, roughly 70% of the MBLY puts on the tape were exchanged as part of what looks to be a two-legged ratio spread. Specifically, it appears one speculator bought to open 5,000 in-the-money March 43 puts, while selling to open 2,000 near-the-money March 35 puts -- helping to offset the cost of the larger block. From the looks of it, this trader is rolling the dice on additional downside through March options expiration -- though this theory may be complicated by Trade-Alert indications that both lots were tied to stock.

On the sentiment front, MBLY received a $2 price-target hike to $43 from Baird, which nonetheless underscored a tepid "neutral" rating. The former comes as a mild surprise, considering the stock has dropped more than 12% year-to-date.

Less surprising is the high level of short interest on Mobileye NV (NYSE:MBLY). Specifically, 14.5% of the stock's float is sold short, and it would take more than six sessions to buy back all these positions, given MBLY's average daily trading volume.


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