3D Systems Corporation (DDD) Deal, Rebound Draws Option Bulls

3D Systems Corporation (DDD) calls are active as the stock rebounds in the wake of a deal

May 19, 2015 at 11:01 AM
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3D Systems Corporation (NYSE:DDD) is on the mend today, up 2.3% at $23.31. The company -- hosting its annual shareholder meeting and analyst event today -- said it inked a reseller deal with Thermo Fisher Scientific Inc. (NYSE:TMO), wherein the latter will immediately begin to offer the former's various printers and software. Against this backdrop, option bulls are blitzing DDD this morning. 

The 3-D printer maker has already seen roughly 23,000 calls cross the tape -- five times the norm. On the flip side, fewer than 4,500 DDD puts have changed hands, signaling a bullish bias. Options expiring at Friday's close represent six of the 10 most active strikes, and the stock's 30-day at-the-money implied volatility has jumped 5.9% to 44%. 

Most popular is the security's now near-the-money weekly 5/22 23.50-strike call, where buy-to-open action has been spotted. By purchasing the calls at a volume-weighted average price (VWAP) of $0.53, the buyers will begin to profit if DDD surmounts $24.03 (strike plus VWAP) by the end of the week, when the options expire. Delta on the call has moved to 0.44 from 0.27 at yesterday's close, indicating a more than 2-in-5 shot of expiring in the money.

Today's appetite for bullish bets marks a shift among DDD's options crowd. On the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), the equity's 50-day put/call volume ratio sits at an annual peak of 0.83, indicating accelerated put buying over call buying during the past 10 weeks. 

Echoing that, today's jump could catch some shorts off guard. Short interest accounts for 35.3% of DDD's total available float, and would take more than two weeks to repurchase, at the stock's average pace of trading.

Prior to today, 3D Systems Corporation (NYSE:DDD) was struggling, and just hit a two-year low of $20.82 on Friday, after announcing a management shake-up. However, the stock is already on pace for a roughly 9% gain this week, and is set to close a second straight session atop its 10-day moving average -- a feat not accomplished since mid-April.


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