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
Updated on Jun 24, 2020 at 10:16 AM

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.

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