Option Traders Pounce as GoPro Inc (GPRO) Sinks

GoPro Inc (GPRO) is fresh off an annual low, despite an Apple Inc. (AAPL) tie

Sep 9, 2015 at 2:45 PM
facebook twitter linkedin


The broad-market benchmarks are extending their losses this afternoon, and one stock leading the way south once again is GoPro Inc (NASDAQ:GPRO). Earlier, the equity hit $34.06 -- its lowest mark in over a year -- and was last seen 8% below breakeven at $34.51, despite an Apple Inc. (NASDAQ:AAPL) tie.

Amid this volatility, GPRO option traders have been active, with intraday volume at 1.7 times the average amount. Among the most active is the September 40 call, and it appears some speculators are purchasing positions in the hopes of a rebound above the round-number $40 level by next Friday's close, when the front-month series expires.  On the flip side, it looks like even shorter-term traders are selling to open the weekly 9/11 38-strike call, anticipating GPRO will end this week south of $38.

To be sure, not everyone is happy about today's sharp drop. During the past 10 weeks at the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), traders have bought to open nearly twice as many calls as puts. The corresponding call/put volume volume ratio of 1.95 ranks in the 62nd annual percentile, suggesting a slightly greater-than-usual appetite for bullish bets over bearish.

Likewise, 10 of 14 analysts consider GoPro Inc (NASDAQ:GPRO) worthy of a "buy" or better rating, while its consensus 12-month price target of $71.71 more than doubles the current price -- and sits in territory not charted since early December. An unwinding of optimism among traders and/or brokerage firms could intensify GPRO's downward momentum.

Grab Your FREE 5 Rules for Trading Stock Trends Report

1606854690

 




 
Special Offers from Schaeffer's Trading Partners