Options Bulls Blitz Mobileye NV (MBLY) After Upgrade

Mobileye NV (MBLY) calls are crossing at a rate five times what's typically seen

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Published on Mar 13, 2015 at 11:12 AM
Updated on Apr 20, 2015 at 5:32 PM

Mobileye NV (NYSE:MBLY) is making moves, gaining 3.2% to trade at $41.68, after Goldman Sachs raised its outlook on the shares to "buy" from "neutral," citing a "rapidly expanding" driver-assistance market. The company has "importance as a potentially gamechanging technology provider of advanced and fully autonomous driving technology in the longer term," Goldman wrote. As a result, MBLY calls are flying off the board, changing hands at a pace five times what's normally seen at this point in the day.

The most popular contract is the June 48 call, where over 4,100 options have crossed -- nearly six times as many as the next closest contract. Buy-to-open activity has been detected here, as traders bet on MBLY to surge north of $48 by the close on Friday, June 19, when the series expires.

The $48 level represents a 15.2% premium to the shares' current price, and territory not seen since late November. In fact, since hitting a record high of $60.28 in early October, MBLY is off almost 31%.

Daily Chart of MBLY since October 2014 with Marker at $48

The stock's decline hasn't deterred options traders, as calls have been the options of choice for some time. Over the past two weeks, for example, speculators have bought to open 1.62 calls for every put at the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX).

Analysts, too, have remained upbeat on Mobileye NV (NYSE:MBLY). Of the nine brokerage firms covering the security, seven deem it a "buy" or better, with the remaining two analysts issuing "hold" ratings. What's more, MBLY's average 12-month price target comes in at $55.22 -- a 32.5% premium to current trading levels.


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