Solid Earnings Report Leaves Wayfair Inc. (W) Bears Unfazed

Despite today's solid earnings report, Wayfair Inc (W) puts are popular

Mar 4, 2015 at 2:41 PM
facebook twitter linkedin

After announcing a narrower-than-expected fourth-quarter loss, Wayfair Inc (NYSE:W) is up over 16% to reach $29.38, bringing the stock's year-to-date gain to 47.9%. What's more, the stock is currently perched firmly above its 10-day moving average, which has served as support since the beginning of February. However, put-buying activity in the stock's options pits has been ramping up.

Drilling down, puts are running at eight times the usual intraday pace today, and outpacing calls by a nearly 3-to-2 margin. Garnering notable attention is W's April 25 put, where buy-to-open activity has been detected. By purchasing this put, traders expect the security to finish south of $25 by the close on Friday, April 17, when the contract expires. Given the stock's standout technicals, though, a portion of these long puts may have been at the hands of shareholders hedging. Delta on the out-of-the-money put is negative 0.21, implying the option has a 21% chance of expiring in the money.

From a broader perspective, short selling ramped up over the past two reporting periods, increasing by nearly 7%. Presently, 33.1% of Wayfair Inc's (NYSE:W) available float is sold short, which would take over 15 sessions to cover, at average trading volumes.

Daily Chart of W Since November 2014 With 10-Day Moving Average

Stop leaving money on the table with the same old broken options trading approach...

There is no options strategy that more perfectly capitalizes during earnings season better than this simple call and put buying strategy. Perfect for aggressive traders looking to recover their suffering portfolios so far in 2022. With the simplest possible options strategy, Schaeffer's team with 100+ years of options trading excellence, target 200% gains on every single trade. So many trades are being beaten down by the market, but don't be one of them! Don't waste another second... join us right now before the next trade is released! 

Schaeffer's Daily Bulletin Offer


Special Offers from Schaeffer's Trading Partners