Groupon, Inc. (GRPN) Traders Expect Post-Earnings Drop

Puts are popular ahead of Groupon Inc's (GRPN) earnings release tomorrow

May 4, 2015 at 2:15 PM
facebook X logo linkedin


Ahead of the company's earnings release scheduled for after the close tomorrow, Groupon Inc (NASDAQ:GRPN) puts are crossing at an accelerated rate. Specifically, the contracts are crossing at four times the expected intraday volume, with heavy attention being paid to the weekly 5/8 6-strike put, where data suggests buy-to-open activity is taking place. These traders are expecting GRPN to fall below $6 by Friday's close -- when the contracts expire -- for the first time since late October.

Widening the sentiment scope reveals option traders have shown a preference for calls over puts during the past 10 weeks. For instance, at the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), GRPN has a 50-day call/put volume ratio of 8.02. This reading is only 8 percentage points from an annual bullish peak.

However, there's a chance some of this call buying isn't that bullish in nature, given the high short interest on the stock. That is, over 60 million GRPN shares are sold short, and it would take bearish traders over eight sessions to buy back, at average daily trading volumes. Therefore, there's a chance some of the recent call buying is short sellers hedging against upside in the underlying.

Groupon Inc (NASDAQ:GRPN) is gaining today, up 5.3% at $7.15. This is a change of pace from the stock's technical performance of late. Over the past two months, GRPN has underperformed the S&P 500 Index (SPX) by almost 16 percentage points.

 

Target Effortless Triple-Digit Gains Every Sunday Evening For Life!

This is your chance to triple your profit potential on Sunday evenings, without spending all your free time watching the market.

On Sundays, as a Weekend Plus subscriber, you’ll get up to 6 trades every Sunday, each targeting gains of 200% or more.

Start targeting gains like the ones our subscribers have seen recently, including:

213.3% GAIN on AutoNation calls
100.0% GAIN on Monster Beverage calls
100.4% GAIN on Walgreens Boots Alliance puts
100.4% GAIN on ON Semiconductor calls
257.7% GAIN on Dell calls

101.0% GAIN on Apollo Global Management calls
103.6% GAIN on JP Morgan  Chase calls
105.3% GAIN on DraftKings calls
101.3% GAIN on Airbnb calls
203.0% GAIN on Shopify calls
102.0% GAIN on Cboe Global Markets calls
100.9% GAIN on Boeing calls
102.1% GAIN on Microsoft puts
102.3% GAIN on First Solar calls
101.5% GAIN on PulteGroup calls
101.0% GAIN on Apple calls
209.4% GAIN on NXP Semiconductors calls
100.8% GAIN on Uber Technologies calls
100.4% GAIN on Academy Sports and Outdoors puts
102.2% GAIN on Trade Desk calls
100.8% GAIN on DoorDash calls
100.0% GAIN on Camping World Holdings puts
100.0% GAIN on Cboe Global Markets calls
100.2% GAIN on C3.ai calls
238.5% GAIN on Oracle calls

 
 
 


 
 

Rainmaker Ads CGI