Options Heat Up as Veeva Systems Inc. (VEEV) Goes Bust

Veeva Systems Inc (VEEV) is slumping after a post-earnings downgrade

Digital Content Group
Mar 4, 2015 at 12:22 PM
facebook twitter linkedin

Cloud software firm Veeva Systems Inc (NYSE:VEEV) is in bust mode today, dropping nearly 22% to trade at $25.50 and landing on the short-sale restricted list, following a poorly received earnings report. Exacerbating the selling pressure is a downgrade to "hold" from "buy" at Deutsche Bank, which also slashed its price target to $30 from $37 -- though Leerink upped its price target to $35 from $30. Meanwhile, options volume is exploding, at 20 times expected intraday levels.

Calls and puts are both seeing heavier-than-usual demand, with the former outstripping the latter on an absolute basis. In terms of specific strikes, VEEV's March 25 and 26 calls are seeing buy-to-open activity, as speculators roll the dice on a rebound by the close on Friday, March 20, when front-month options expire. However, the most active strike is the March 25 put, with traders initiating long positions in hopes the underlying will dip below the quarter-century mark over the next nine days.

Elsewhere, one group that's likely celebrating VEEV's pullback is short sellers. Short interest has risen 10.3% since the start of the year, and now makes up 15.1% of the stock's total float. At the equity's typical trading levels, it would take 11 sessions to cover these bearish bets.

In other news, Veeva Systems Inc (NYSE:VEEV) said last night it will acquire Qforma's Crowdlink in an all-cash deal. The latter specializes in gathering and analyzing data to determine sentiment, trends, and social network behavior.


Minimize Risk While Maximizing Profits

There is no options strategy like this one, which consistently minimizes risk while maintaining maximum profits. Perfect for traders looking for ways to control risk, reduce losses, and increase the likelihood of success when trading calls and puts. The Schaeffer’s team has over 41 years of options trading success targeting +100% gains on every trade. Rest assured your losses are effectively limited to your initial cost at the time of making your move! Don't waste another second... join us right now before the next trade is released! 


300x250 - Banner 3 - v1