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

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

by Alex Eppstein

Published on May 7, 2015 at 11:30 AM
Updated on Jun 24, 2020 at 10:16 AM

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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