Are FireEye, Inc. (FEYE) Option Traders Switching Sides?

FireEye Inc (FEYE) traders are buying April calls

by Griffin Kruse

Published on Mar 9, 2015 at 2:58 PM
Updated on Aug 5, 2020 at 10:07 AM

FireEye Inc (NASDAQ:FEYE) has been trending higher, with the shares adding 73.8% since hitting an all-time low of $24.81 on Oct. 13. So far today, the security has added 0.7% to linger near $43.12. Accordingly, bullish activity in the options pits is ramping up, marking a change of pace for the cybersecurity firm.

In afternoon action, calls have more than tripled puts. Today's most active contract is the April 44 call, which is seeing a large amount of buy-to-open activity. By purchasing this call, traders expect the security to push its way above the strike price by the close on Friday, April 17, when the contract expires. Delta on the April 44 call stands at 0.48, implying a 48% chance of expiring in the money.

However, as alluded to earlier, today's appetite for bullish bets runs counter to the recent trend. FEYE's 10-day International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) put/call volume ratio of 0.57 sits in the 82nd percentile of its annual range. What's more, the stock's Schaeffer's put/call open interest ratio (SOIR) of 1.04 sits at an annual peak, implying that short-term option players haven't been more put-heavy during the past year.

Elsewhere, the brokerage bunch is divided on the equity as well, with 48% of covering analysts rating the stock a "hold" or worse. Plus, the consensus 12-month price target of $43.35 is within striking distance of FEYE's current perch. Meanwhile, short interest has increased by nearly 7% over the past two weeks, and now accounts for over 15% of FEYE's available float. Should FireEye Inc (NASDAQ:FEYE) extend its upward momentum, a mass exodus of option bears, a round of upbeat analyst notes, or a short squeeze could propel the stock even higher.

Daily Chart of FEYE Since October 2014

A Schaeffer's 39th Anniversary Exclusive!

8 Top Stock Picks for 2020

Access your FREE insider report before it's too late!


  
 
 

Partnercenter