Option Bears Circle Ocwen Financial Corporation (OCN)

Ocwen Financial Corp (OCN) option bears are active after the firm delayed its annual report

Mar 18, 2015 at 1:45 PM
facebook X logo linkedin


Option bears are blitzing Ocwen Financial Corp (NYSE:OCN), after the firm once again delayed its annual report, and said it will sell $9.6 billion in mortgage servicing rights to a Walter Investment Management Corp (NYSE:WAC) subsidiary. After being temporarily halted and landing on the short-sale restricted list, OCN was last seen 1.7% lower at $8.84, and puts are trading at twice the normal afternoon clip.

More than 9,000 OCN puts have traded thus far -- three times the number of calls exchanged. Most active is the March 8 put, which it appears traders are buying to open to gamble on a retreat south of $8 by Friday's close, when front-month options expire. OCN hit an intraday nadir of $8.06 today.

Even before today's drama, OCN option players were picking up puts at a near annual-high clip. On the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), the stock's 10-day put/call volume ratio of 7.03 stands higher than 96% of all other readings from the past year.

In the same vein, OCN's Schaeffer's put/call open interest ratio (SOIR) of 1.94 registers in the 96th percentile of its annual range. In simpler terms, near-term option players have rarely been more put-biased during the past 12 months.

Meanwhile, short interest accounts for nearly one-third of OCN's total available float. Among analysts, just one of six offers up a "buy" or better rating, underscoring the rampant skepticism on the Street.

On the charts, it's been a rough ride for Ocwen Financial Corp (NYSE:OCN), with the stock surrendering roughly three-quarters of its value in the past year. Since its post-earnings bear gap in late July, the equity's rebound attempts have been halted by its descending 60-day moving average. Off the charts, OCN continues its efforts to raise cash, but today warned that a failure by Home Loan Servicing Solutions Ltd (NASDAQ:HLSS) to meet funding obligations "could have a material negative impact" on the company's financial situation.

Daily Chart of OCN since June 2014 with 60-Day Moving Average
 

Target Effortless Triple-Digit Gains Every Sunday Evening For Life!

This is your chance to triple your profit potential on Sunday evenings, without spending all your free time watching the market.

On Sundays, as a Weekend Plus subscriber, you’ll get up to 6 trades every Sunday, each targeting gains of 200% or more.

Start targeting gains like the ones our subscribers have seen recently, including:

213.3% GAIN on AutoNation calls
100.0% GAIN on Monster Beverage calls
100.4% GAIN on Walgreens Boots Alliance puts
100.4% GAIN on ON Semiconductor calls
257.7% GAIN on Dell calls

101.0% GAIN on Apollo Global Management calls
103.6% GAIN on JP Morgan  Chase calls
105.3% GAIN on DraftKings calls
101.3% GAIN on Airbnb calls
203.0% GAIN on Shopify calls
102.0% GAIN on Cboe Global Markets calls
100.9% GAIN on Boeing calls
102.1% GAIN on Microsoft puts
102.3% GAIN on First Solar calls
101.5% GAIN on PulteGroup calls
101.0% GAIN on Apple calls
209.4% GAIN on NXP Semiconductors calls
100.8% GAIN on Uber Technologies calls
100.4% GAIN on Academy Sports and Outdoors puts
102.2% GAIN on Trade Desk calls
100.8% GAIN on DoorDash calls
100.0% GAIN on Camping World Holdings puts
100.0% GAIN on Cboe Global Markets calls
100.2% GAIN on C3.ai calls
238.5% GAIN on Oracle calls

 
 
 


 
 

Rainmaker Ads CGI