LinkedIn Corporation (LNKD) Rally Attracts Option Bulls

LinkedIn Corp (NYSE:LNKD) calls are trading at two times the average intraday pace

Jun 2, 2015 at 11:23 AM
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LinkedIn Corp (NYSE:LNKD) popped yesterday -- and closed north of a key moving average -- on rumors of a possible Icahn stake. The shares are extending this run today, up 3% at $206.75. The positive price action has call players flocking to the equity's options pits, with the contracts changing hands at two times the average intraday pace. Meanwhile, LNKD's 30-day at-the-money implied volatility is up 5.6% at 27.3%, signaling elevated demand for the stock's near-term options.

Drilling down, LNKD's weekly 6/5 205-strike call has seen the most action. It seems safe to assume new positions are being purchased here for a volume-weighted average price (VWAP) of $2.10, making breakeven ahead of this Friday night's expiration $207.10 (strike plus VWAP). Earlier, the equity topped out at an intraday high of $207.19.

More broadly speaking, call players have set up camp in LNKD's options pits for some time now. For starters, the stock's 10-day International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) call/put volume ratio of 1.94 ranks in the 92nd annual percentile. Plus, the equity's Schaeffer's put/call open interest ratio (SOIR) of 0.84 sits lower than 84% of all similar readings taken in the past year, meaning short-term speculators are more call-heavy than usual.

Meanwhile, LinkedIn Corp (NYSE:LNKD) could continue to garner some attention tomorrow. Specifically, the company is slated to host its annual shareholder meeting, beginning at 1 p.m. ET.
 

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