Yahoo! Inc. (YHOO) Option Bulls Bet on a Breakout

Yahoo! Inc. (YHOO) has been unable to gain ground since its late-January bear gap

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Published on Mar 25, 2015 at 12:31 PM
Updated on Apr 20, 2015 at 5:09 PM

Calls are changing hands at a quicker-than-usual rate in Yahoo! Inc.'s (NASDAQ:YHOO) options pits today, after the security was featured on CNBC's Fast Money segment yesterday. The stock's weekly 3/27 45-strike call has seen over 9,300 contracts cross, more than four times as many as the next closest option. It seems safe to assume the contracts are being bought to open -- a theory echoed by data from the International Securities Exchange (ISE) -- as traders bet on the shares to topple $45 before the close this Friday, when the options expire.

Today's behavior marks a change in speculators' usual routine, as puts have been popular of late, according to data from the ISE, Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX). Across these exchanges, YHOO's 10-day put/call volume ratio of 0.47 is only 3 percentage points from a 12-month high. In other words, puts have been bought to open over calls at a near-annual-high rate in recent weeks.

Checking out the charts, Yahoo! Inc. (NASDAQ:YHOO) gapped lower in late January following a poorly received earnings report, and since then, the stock has been unable to make up ground, trading between $42 and $45. On the year, the shares have dropped 12%. YHOO was last seen flat on the day at $44.42.

Daily chart of YHOO since January 2015

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