FXCM Inc. (FXCM) Mobbed by Pre-Earnings Option Bulls

FXCM Inc (FXCM) will divulge first-quarter numbers after today's close

by Alex Eppstein

Published on May 8, 2015 at 1:25 PM
Updated on Jun 24, 2020 at 10:16 AM

FXCM Inc (NYSE:FXCM) is running higher ahead of tonight's first-quarter earnings release -- a fact not lost on the forex stock's options traders. At last check, the equity's calls were crossing at seven times the usual intraday rate, and outpacing puts by a more than 58-to-1 margin.

Most active is the May 2 call, where it looks like buy-to-open activity is transpiring. By purchasing these positions at a volume-weighted average price (VWAP) of $0.07 apiece, the speculators are counting on FXCM to rally north of the at-expiration breakeven mark of $2.07 (strike plus VWAP) by next Friday's close -- when front-month options expire.

Today's call-bias reflects longer-term options trading trends. During the past two weeks at the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), FXCM has seen 6,648 calls bought to open versus roughly 120 puts.

As alluded to, these bullish bettors are being rewarded today. FXCM Inc (NYSE:FXCM) has soared 11.5% to hover around $2.03. However, it should be noted that from a longer-term perspective, the stock is sitting on a dramatic 88% year-to-date deficit. courtesy of a mid-January fundamental blow.

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