Groupon, Inc. (GRPN) Traders Count on a Comeback

Groupon Inc (GRPN) traders are rolling the dice on a rebound

by Alex Eppstein

Published on Jun 2, 2015 at 2:06 PM
Updated on Jun 24, 2020 at 10:16 AM

Groupon Inc (NASDAQ:GRPN) has dropped 3.5% today to trade at $6.06, though it's unclear what's driving the sell-off. Meanwhile, calls are crossing at double the rate of puts, with buy-to-open activity transpiring at the June 6.50 call. By purchasing these positions, speculators anticipate GRPN will rebound above $6.50 by the close on Friday, June 19, when front-month options expire.

This activity represents a break from longer-term trends. During the past 10 weeks at the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), GRPN has registered a put/call volume ratio of 0.29 -- which outranks four-fifths of comparable readings from the last 52 weeks.

There's also plenty of pessimism among short sellers. Nearly 14% of GRPN's float is sold short. At the equity's average daily trading pace, it would take more than one week to repurchase all of these bearish bets.

Technically speaking, Groupon Inc (NASDAQ:GRPN) hasn't done much to disprove its detractors. Since their late-February peak at $8.37, the shares have shed 27.6%, pressured by their 10- and 20-day moving averages. Off the charts, GRPN will make an appearance tomorrow at the Bank of America-Merrill Lynch Global Technology Conference.

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