Yahoo! Inc. (YHOO) Bears Emerge Amid IRS Chatter

Yahoo! Inc. (YHOO) traders are picking up puts amid concerns about the Alibaba Group Holding Ltd (BABA) spin-off

by Andrea Kramer

Published on Jun 11, 2015 at 2:46 PM

The shares of Yahoo! Inc. (NASDAQ:YHOO) are down 2.7 % at $40.95 -- and poised to close at a year-to-date low -- amid another round of tax chatter. Specifically, Capstone reportedly said the IRS is unlikely to green-light a tax-free spin-off of the firm's stake in Alibaba Group Holding Ltd (NYSE:BABA).  Whatever the story, options traders are placing short-term bearish bets at a rapid-fire rate today. 

YHOO puts are crossing at twice the average afternoon clip, with buy-to-open action detected at the weekly 6/12 40.50- and 41-strike puts -- the latter of which is most popular so far. By purchasing the puts to open, the buyers expect YHOO to extend its retreat through tomorrow's close, when the contracts expire. Specifically, the puts will be in the money if YHOO is trading south of the respective strikes. 

Today's appetite for bearish bets is just more of the same, though. On the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), Yahoo! Inc. (NASDAQ:YHOO) sports a 10-day put/call volume ratio of 0.43 -- in the 83rd percentile of its annual range. In other words, option buyers have picked up YHOO puts over calls at a faster-than-usual clip during the past two weeks.

A Schaeffer's exclusive!

The Expert's Guide

Access your FREE trading earning announcements before it's too late!



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

Look Who's Going Bankrupt Next in America
Porter Stansberry is making a concerning prediction.
Apparel Name Boosted By Earnings Beat
Three analysts have moved their price targets down to $60
Black & Decker Withdraws 2020 Guidance, Cuts Non-Essential Staff
Black & Decker said it would reduce any non-essential staff and decided to withdraw its 2020 forecast
Look Who's Going Bankrupt Next in America
Porter Stansberry is making a concerning prediction.