Call Buying Pops on SodaStream International Ltd. (SODA)

Sodastream International Ltd (NASDAQ:SODA) calls are outpacing puts by a 24-to-1 margin

by Josh Selway

Published on May 11, 2015 at 2:24 PM
Updated on Jun 24, 2020 at 10:16 AM

Over the past two weeks, Sodastream International Ltd (NASDAQ:SODA) calls have been in high demand. Specifically, three calls have been bought to open for every put at the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX). This 10-day call/put volume ratio of 3.00 outranks 68% of readings from the past year.

This trend is continuing today, as SODA's calls are changing hands at eight times the expected intraday pace, and are outpacing puts by a margin of nearly 24-to-1. Data suggests traders are buying to open the July 22.50 call -- the stock's most popular contract. By doing so, the traders are betting on the stock to take out $22.50 by July options expiration.

Looking back, SODA hasn't traded north of this strike since late November, with the shares churning between $18 and $21 for most of 2015. For the contracts to move into the money, the equity will need to take out its 10-month moving average -- which sits at $22.45 -- for the first time since September 2013. At last check, the stock was 1.4% higher at $21.85, extending last week's post-earnings momentum, and possibly benefiting from a Monster Beverage Corp (NASDAQ:MNST) halo lift.

The brokerage bunch has taken a predominantly bearish stance on SODA. Of the nine brokerage firms following Sodastream International Ltd (NASDAQ:SODA), seven say it's only a "hold." On top of this, SODA's average 12-month price target sits at a discount to current levels, at $21.17 -- though some on the Street were forced to rethink their outlooks following the aforementioned earnings beat last week. 


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