Is Yelp Inc. (YELP) Headed for Lower Lows?

After being halted earlier, Yelp Inc (NYSE:YELP) resumed trading around 1 p.m. ET, and promptly plunged to a nearly two-year low of $36.10. The equity was last seen off 10.6% at $37.92 -- and on the short-sale restricted list. Prompting this afternoon's sharp drop are reports the company is shelving plans to put itself up on the auction block. Option traders, meanwhile, are convinced additional losses are on the horizon, with puts crossing the tape at four times the average intraday pace.

Almost one-third of the day's put activity has centered on the August 25 strike, where it appears new positions are being purchased. By buying the puts to open, the expectation is for YELP to tumble south of $25 -- territory not charted since April 2013 -- by the close on Friday, August 21, when the back-month series expires.

Widening the sentiment scope reveals call buyers have been active in YELP's options pits in recent months. At the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), the equity's 50-day call/put volume ratio of 2.48 ranks in the 99th annual percentile. In simpler terms, calls have been bought to open over puts with more rapidity just 1% of the time in the past year.

Echoing this is YELP's Schaeffer's put/call open interest ratio (SOIR) of 0.45. Not only does this show that call open interest more than doubles put open interest among options expiring in three months or less, but it rests lower than 89% of all similar readings taken over the last 12 months. Simply stated, speculative traders are more call-skewed than usual.

What's surprising is that this amount of optimism is levied toward a stock that's had a terrible time on the charts this year. Heading into today's trading, YELP had already lost more than one-fifth of its value in 2015. Plus, the equity has found a stern layer of resistance from the round-number $40 mark in recent months. Yelp Inc (NYSE:YELP) could face even more headwinds should option traders continue to switch sides -- or analysts continue to re-evaluate their ratings.