Yelp Inc. (YELP) Option Volume Skyrockets on Buyout Buzz

Yelp Inc (YELP) call options are flying off the shelves amid reports of a possible sale

by Andrea Kramer

Published on May 7, 2015 at 1:51 PM
Updated on Jun 24, 2020 at 10:16 AM

Online review issue Yelp Inc (NYSE:YELP) skyrocketed around 1 PM ET, amid reports the company is exploring a sale. The stock was last seen 15.7% higher at $44.18, and option volume -- especially on the bullish side -- has skyrocketed.

YELP has now seen roughly 31,000 calls cross the tape -- six times the average intraday volume, and nearly three times the number of puts traded. In light of the news and the stock's subsequent jump, the equity's 30-day at-the-money implied volatility has soared 33% to 51.4% -- higher than 48% of all other readings from the past year.

A healthy portion of the action transpired just after the aforementioned rumors hit the Street, with bulls zeroing in on weekly 5/8 calls, which expire at tomorrow's close. Specifically, buy-to-open action has been detected at the weekly 5/8 39-, 39.50-, 40-, and 40.50-strike calls. By purchasing the options to open, the buyers expect YELP to extend its journey north of the strikes through the next 24-plus hours.

Despite Yelp Inc's (NYSE:YELP) surge, the shares remain more than 20% lower for 2015, and are struggling to surmount their 10-day moving average. In fact, the equity gapped lower on an earnings miss on April 30, and just touched an annual low of $37.91 yesterday.


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