Bears Active as Nu Skin Enterprises, Inc. (NUS) Breaks Down

Bearish betting heats up as Nu Skin Enterprises, Inc. (NUS) dives on fundamental follies

May 7, 2015 at 11:30 AM
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A first-quarter earnings miss, reduced 2015 profit forecast, and news of a Securities and Exchange Commission (SEC) investigation are destroying Nu Skin Enterprises, Inc. (NYSE:NUS). At last check, shares of the skin care company were down 14% at $50.95, and on the short-sale restricted list. Meanwhile, bears looking for an alternate way to gamble on NUS are piling into its options pits.

By the numbers, over 3,200 puts are on the tape -- 10 times the expected intraday volume, and twice the rate of calls. Digging deeper, traders are buying to open the weekly 5/8 49-strike and May 43 puts, hoping NUS will breach the strikes by the respective expiration dates -- at the close this Friday and next.

This is quite unusual, historically speaking. The security's 50-day call/put volume ratio at the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) is 2.43 -- which rests just 4 percentage points from a 12-month high.

On the charts, Nu Skin Enterprises, Inc. (NYSE:NUS) has put on a strong showing, today notwithstanding. Even after accounting for this morning's bear gap, the stock has rallied around 17% year-to-date -- though it's currently sitting below its 100-day moving average for the first time since early February.

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