Option Traders Busy as Confusion Swirls Around Avon Products, Inc. (AVP)

Avon Products, Inc. (AVP) denied received a buyout offer from PTG Capital

by Alex Eppstein

Published on May 14, 2015 at 2:05 PM

Avon Products, Inc. (NYSE:AVP) has had a wild day -- touching a more than 20-year low at one point, and charging nearly 20% higher at another -- amid buyout buzz. At last check, the stock was up 5% at $7, and intraday call volume is running at 11 times the norm. By the numbers, 48,000 calls are on the tape, versus 26,000 puts.

Digging deeper, traders are buying to open AVP's May 7 call, expecting to the shares to continue muscling north through tomorrow's close, when front-month options expire. The one option garnering even more attention is the January 2016 7-strike put, where fresh positions are also being purchased. However, these speculators think AVP will move south by January 2016 expiration.

From a longer-term perspective, calls have been the options of choice. AVP has amassed a 10-day call/put volume ratio of 2.17 on the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), with long calls more than doubling puts. What's more, this ratio outranks nearly three-quarters of comparable metrics from the past year.

As previously mentioned, Avon Products, Inc. (NYSE:AVP) has been all over the place today -- and trading was temporarily halted three times. The shares spent some time in the red before spiking on a supposed buyout bid from PTG Capital Partners Ltd. However, AVP quickly denied any receiving any communication from PTG Capital -- and added it has "not been able to confirm that such an entity exists" -- causing the stock to trim a significant portion of its gains.

A Schaeffer's exclusive

6 Sectors for Summer

Access your FREE insider report before it's too late!


  
 

Partnercenter


NEW! Explore Schaeffer’s Partners' deals and get connected to top online brokerages with deals tailored exclusively for our readers.  Get answers to your questions regarding transfer fees, commission rates, programs and available discounts related to online trading services.

MORE | MARKETstories


The Next Big Player in U.S. MJ Boom
Most pure-play marijuana stocks in the U.S. trade on the Over-the-Counter stock exchange.
Planet Fitness Stock Lifted Amid Re-Opening Optimism
Planet Fitness reopened around 800 facilities in North America
Coffee Stock Drops Despite Cost-Cutting Initiatives
Starbucks asked employees to further limit working hours or take unpaid leave
The Big Bankruptcy You Should Be Afraid Of
Porter Stansberry is making a concerning prediction.