Gogo Inc (GOGO) is trading lower even after the company's quarterly results beat the Street's expectations
Volume is running at twice the average intraday rate in Gogo Inc's (NASDAQ:GOGO) options pits. It appears traders are buying to open the June 24 call in hopes of the shares toppling $24 by June options expiration. Looking back, GOGO hasn't traded above $24 in over a year.
Calls have been seeing increased interest from GOGO's speculators for a while now. The security's Schaeffer's put/call open interest ratio (SOIR) comes in at 0.41, meaning call open interest more than doubles put open interest among options expiring in three months or less. Plus, this reading falls in its 11th annual percentile, signaling an unusually strong preference for short-term calls over puts of late.
However, GOGO's short interest is also worth noting, as over 37% of its float is sold short. It would take bears over five weeks to buy back their shorted shares, at the stock's average daily volumes. There's a chance some of the recent interest in calls is from shorts hedging against any upside.
Gogo Inc (NASDAQ:GOGO) has done well on the charts in 2015, adding 24.5% year-to-date. However, the shares are off today, even after the company reported first-quarter numbers that beat the Street's expectations. At last check, GOGO was down 1.1% at $20.58, and is in danger of finishing below its 40-day moving average for the fist time since early February.