Call Buying Rampant as Nokia Corporation (NOK) Pops

Nokia Corporation (ADR) (NOK) traders see upside ahead

Apr 10, 2015 at 2:02 PM
facebook twitter linkedin


Nokia Corporation (ADR) (NYSE:NOK) is rallying today, up 4% to hover near $8.04 amid speculation over a possible M&A deal for its maps business. As a result, NOK options bulls have been active, with some traders betting on short-term upside for the equity.

Drilling down, NOK calls are moving at 23 times the average intraday rate, and are outpacing puts by a roughly 14-to-1 margin. The day's most active option by far is the April 8 call, where apparent buy-to-open activity is taking place. By purchasing this call at a volume-weighted average price (VWAP) of $0.14, the buyers will profit if the shares of NOK muscle their way above $8.14 (strike plus VWAP) by the close on Friday, April 17, when the contract expires.

Today's penchant for calls mirrors recent trends in the options pits. Over the past 10 days at the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), 19.46 NOK calls have been bought to open for every put, which is a higher ratio than 77% of all equivalent readings taken over the past year. Traders are paying relatively modest prices for their short-term bets on NOK, as its Schaeffer's Volatility Index (SVI) of 25% ranks in the 10th percentile of its annual range.

Elsewhere, a sizeable portion of the brokerage bunch is skeptical of NOK. Of the 12 analysts covering Nokia Corporation (ADR) (NYSE:NOK), seven rate it a "hold" or "strong sell." However, with the stock pinned in a sideways channel between $7 and $8 for the better part of the last 18 months, it's no surprise that skepticism reigns among analysts.

Daily Chart of NOK Since October 2014
 

Stop leaving money on the table with the same old broken options trading approach...

There is no options strategy that more perfectly capitalizes during earnings season better than this simple call and put buying strategy. Perfect for aggressive traders looking to recover their suffering portfolios so far in 2022. With the simplest possible options strategy, Schaeffer's team with 100+ years of options trading excellence, target 200% gains on every single trade. So many trades are being beaten down by the market, but don't be one of them! Don't waste another second... join us right now before the next trade is released! 

 
Schaeffer's Daily Bulletin Offer
 


 


 
Special Offers from Schaeffer's Trading Partners