DryShips Inc. (DRYS) Option Bulls Climb On for the Long Haul

The Nasdaq sent DryShips Inc. (DRYS) a delisting warning

Apr 16, 2015 at 10:49 AM
facebook twitter linkedin


DryShips Inc. (NASDAQ:DRYS) is following in the bearish footsteps of the broader equities market today, down 2.8% to trade at $0.77. In the equity's options pits, meanwhile, call volume has soared to 10 times what's typically seen at this point in the day, and it appears nearly all of this morning's speculators are betting on DRYS to bounce higher over the next nine months.

Specifically, the security's January 2016 0.50-strike call is in high demand, with 3,501 contracts on the tape at last check -- roughly 95% of the day's total intraday volume. It looks as though new positions are being purchased for a volume-weighted average price (VWAP) of $0.40, making at-expiration breakeven for the speculators $0.90 (strike plus VWAP). Should the shares be sitting south of $0.50 at January options expiration, though, the most today's call buyers stand to lose is the premium paid.

Widening the sentiment scope reveals traders at the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) have shown a preference for long calls over puts in recent weeks. Specifically, the stock sports a top-heavy 20-day call/put volume ratio of 16.40 across this trio of exchanges.

Technically speaking, it's been a rough road for DryShips Inc. (NASDAQ:DRYS). Over the past 52 weeks, the shares have surrendered more than three-quarters of their value. In fact, the shares have not closed north of $1 since Feb. 25, prompting the Nasdaq to warn the company of a possible delisting.

Daily Chart of DRYS Since April 2014
 

Minimize Risk While Maximizing Profits

There is no options strategy like this one, which consistently minimizes risk while maintaining maximum profits. Perfect for traders looking for ways to control risk, reduce losses, and increase the likelihood of success when trading calls and puts. The Schaeffer’s team has over 41 years of options trading success targeting +100% gains on every trade. Rest assured your losses are effectively limited to your initial cost at the time of making your move! Don't waste another second... join us right now before the next trade is released! 

 


 


 
Special Offers from Schaeffer's Trading Partners