Fitbit Inc (FIT) Option Bulls Eye a Round-Number Breakout

Fitbit Inc's (NYSE:FIT) weekly 10/2 40-strike call is being bought to open today

by Karee Venema

Published on Oct 1, 2015 at 3:16 PM
Updated on Jun 24, 2020 at 10:16 AM

Speculators have shown a distinct preference for calls over puts in Fitbit Inc's (NYSE:FIT) options pits in recent weeks, per data from the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX). Specifically, over the past 10 sessions, option traders have bought to open 15,328 calls, compared to 7,328 puts, resulting in a top-heavy call/put volume ratio of 2.09.

Along similar lines, FIT sports a Schaeffer's put/call open interest ratio (SOIR) of 0.49. In other words, call open interest more than doubles put open interest among options set to expire in three months or less.

This call-skewed activity is continuing today, with calls outpacing puts by a nearly 5-to-1 ratio. The stock's weekly 10/2 series -- which expires at tomorrow's close -- is receiving notable attention, and accounts for five of FIT's 10 most active options.

Seeing the most activity is FIT's weekly 10/2 40-strike call, with all signs suggesting new positions are being purchased. By buying the calls to open, speculators expect the stock be sitting north of the round-number $40 mark at week's end.

Technically speaking, FIT settled north of this level as recently as Sept. 18. However, it also coincides with the equity's newly formed 50-day moving average -- a trendline that rejected the security's mid-September advances. Longer term, Fitbit Inc (NYSE:FIT) has tacked on 26% since its June 18 open at $30.40, and was last seen lingering near $38.30.

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