Ongoing Woes Lure Yelp Inc. (YELP) Option Bears

Yelp Inc (YELP) puts are trading at 23 times the usual intraday rate

Digital Content Group
Mar 19, 2015 at 11:26 AM
facebook X logo linkedin

Yelp Inc (NYSE:YELP) is sinking this morning -- down 4.4% at $44.78, as the company's business practices have recently come under increasing scrutiny. In fact, last week, reports surfaced of an upcoming anti-YELP documentary. Turning to the options pits, puts are flying off the shelves at 23 times typical intraday levels -- and are outstripping calls by a more than 3-to-1 margin.

Diving right in, YELP's most active option is the April 45 put, which is seeing buy-to-open activity, according to Trade-Alert. In other words, these traders are expecting shares of the business review site to tumble even further below $45 through the close on Friday, April 17, when the back-month options expire.

Today's preference for YELP puts over calls is business as usual, per data from the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX). The stock's 10-day put/call volume ratio across those exchanges is 1.25 -- just 4 percentage points from a 12-month peak.

Conversely, sentiment remains sanguine among the brokerage bunch, despite Yelp Inc's (NYSE:YELP) year-to-date deficit of more than 18%. In fact, over two-thirds of covering analysts rate the equity a "buy" or better, while its average 12-month price target of $65.96 stands in territory not charted since late October. This leaves the door wide open for a potential round of bearish brokerage notes to pressure YELP further south.


Unlock Weekend Profits with Chris Prybal's Favorite Strategy Up +487.5% in 2024

With the markets going left, right, and sideways, you need to have a plan now more than ever. 

Expert Trader Chris Prybal is no stranger to volatility, and has mastered finding big stock rallies while other traders aren't looking over the weekend. Rallies that produced gains like +207% on RTX calls, +236% on MARA calls, and +238% on NET calls.

A few simple moves on Sunday at 7pm could be the “Secret Sauce” your portfolio needs to not just stay afloat, but make unprecedented gains in this turbulent market.

Don’t sit on the sidelines, beat the market with Chris Prybal's strategy. Join him now!




Rainmaker Ads CGI