Rebound Has FXCM Inc. (FXCM) Bulls Hungry for More

FXCM Inc (FXCM) traders are buying April calls

Mar 25, 2015 at 3:31 PM
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FXCM Inc (NYSE:FXCM) announced today that it is selling its Japan-based arm to Rakuten Securities for approximately $62 million, sending the shares up 1.9% to hit $2.11. Prior to today, FXCM was tanking, and is down 83.3% since the Swiss National Bank dealt a blow on Jan. 15. However, option traders today are gambling on an extended rebound for the forex concern.

Drilling down, calls have been trading at about double the average intraday rate, and are outpacing puts by an over 36-to-1 margin. One of today's most active contracts is the April 2 call, where it appears some of the action is of the buy-to-open variety. Said another way, traders are gambling on FXCM to continue its trek above the $2 mark through the close on Friday, April 17, when the contract expires.

Today's appetite for short-term calls mirrors recent sentiment in the options pits. Over the last 10 days at the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), 7.11 FXCM calls have been bought to open for every put. What's more, the security's Schaeffer's put/call open interest ratio (SOIR) of 0.13 sits in the 15th percentile of its annual range, showing that short-term traders have rarely been this call-skewed over the past year.

Meanwhile, the brokerage bunch is unanimously skeptical of FXCM Inc (NYSE:FXCM), as all five covering analysts rate the stock a "hold" or worse. Additionally, the stock's consensus 12-month price target of $1.33 sits well below current trading levels.

Daily Chart of FXCM Since December 2014

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