Under Armour, Inc. (UA) Option Bears Come Out of Hiding

Despite the stock's success on the charts, put buyers are focusing on Under Armour Inc (UA)

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Published on Mar 31, 2015 at 2:50 PM
Updated on Apr 20, 2015 at 5:32 PM

Put volume is accelerated in Under Armour Inc's (NYSE:UA) options pits today. The most popular contract is the in-the-money April 82.50 put, with data suggesting buy-to-open activity. Traders purchasing these options are hoping for UA to reverse its current uptrend and settle below $82.50 at expiration, at the close on Friday, April 17.

Today's put buying is not a common sight in the equity's options pits. Over the past 50 sessions, UA's call/put volume ratio at the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) comes in at 1.68, higher than 78% of all readings from the past year. In short, calls have been bought to open over puts at a faster-than-usual clip.

However, pockets of pessimism still surround UA. For instance, 12 of 26 covering analysts claim the stock is a "hold" or worse. What's more, the security has already surpassed its average 12-month price target of $78.19.

Skepticism can be found outside of the brokerage bunch, as well. Almost 11 million shares of UA are sold short, accounting for nearly seven sessions' worth of trading, at normal daily volumes.

UA Short Interest

As alluded to, Under Armour Inc (NYSE:UA) has continued to outperform, even in the face of such downbeat attitudes. Year-over-year, the shares have added 40%. Should UA continue to dominate on the charts, it could benefit from a round of analyst upgrades, price-target hikes, and/or short covering. In fact, this could be happening now. Despite its still-high levels, short interest decreased 13.3% in the last two reporting periods; also, the security saw its price target lifted by $3 to $85 at Deutsche Bank today. UA was last seen 1.7% higher at $81.24.


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