Pandora Media, Inc. (P) Traders Eye a Big-Time Rebound

Pandora Media Inc (NYSE:P) is off 3.2% this afternoon at $15.69, as hype swirls around newly re-launched Tidal, a rival in the streaming-music market. Options traders are reacting by honing in on P puts, which are changing hands at 1.3 times the expected intraday rate.

However, digging deeper shows P's most active option is actually a call. Specifically, the January 2016 23-strike call has seen the most action, with 2,000 contracts -- including a block of 1,900 -- on the tape. It's possible these positions are being bought to open. If so, the speculators are rolling the dice on a strong rally from now through January 2016 options expiration, as the stock's current price is 46.6% below the strike.

P hasn't done much to inspire that type of confidence. The shares have surrendered 12% year-to-date, and half their value over the last 52 weeks.

Not surprisingly, short interest has been on the rise, jumping 19.6% since early January. Currently, 16% of Pandora Media Inc's (NYSE:P) float is sold short, which represents a week's worth of trading, at typical daily volumes. In fact, it's possible some of today's potential deep out-of-the-money call buyers are short sellers hedging against an unforeseen spike in the shares.