Bulls Make a Beeline for Bed Bath & Beyond Inc. (BBBY) Amid Buyout Buzz

Bed Bath & Beyond Inc.'s (NASDAQ:BBBY) call volume has surged to 12 times what's typically seen at this point in the day

Oct 5, 2015 at 12:45 PM
facebook X logo linkedin

Call players are flooding into Bed Bath & Beyond Inc.'s (NASDAQ:BBBY) options pits today, with the contracts crossing at 12 times the average intraday rate -- and outpacing puts by a 13-to-1 margin. The stock is up 1.3% at $58.16 amid unconfirmed reports the firm may be exploring strategic options, and it seems weekly traders are hot to get a piece of the buyout buzz

Drilling down, BBBY's weekly 10/9 58.50- and 59-strike calls have seen the most action, with a collective 9,135 contracts on the tape at last check. All signs point to buy-to-open activity, meaning speculators expect the stock to extend today's rally through week's end -- when the series expires. Should the security settle south of the strikes at Friday's close, though, the most either set of call buyers stands to lose is the initial premium paid.

Widening the sentiment scope reveals today's accelerated call activity runs counter to the withstanding trend. At the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), for example, BBBY's 50-day put/call volume ratio of 0.88 ranks in the 71st percentile of its annual range. Simply stated, puts have been bought to open over calls at a faster-than-usual clip.

Echoing this is BBBY's Schaeffer's put/call open interest ratio (SOIR) of 1.69, which rests higher than 64% of all similar readings taken in the past year. In other words, short-term speculators are more put-skewed than usual toward the equity.

This skepticism has spilled outside of the options arena, as well, with short interest up 15.4% in the last two reporting periods. What's more, short interest now accounts for a lofty 12.6% of the stock's available float, or 11.9 times its average daily trading volume. Plus, 13 out of 19 analysts maintain a "hold" or worse recommendation toward BBBY.

Technically speaking, the stock has been a long-time laggard. Year-to-date, shares of Bed Bath & Beyond Inc. (NASDAQ:BBBY) have shed more than 23% -- and hit an annual low of $56.01 during last Friday's volatile session. However, thanks to today's rumor-related pop, BBBY is on pace to close north of its 10-day moving average for the first time since Sept. 16.

Target Effortless Triple-Digit Gains Every Sunday Evening For Life!

This is your chance to triple your profit potential on Sunday evenings, without spending all your free time watching the market.

On Sundays, as a Weekend Plus subscriber, you’ll get up to 6 trades every Sunday, each targeting gains of 200% or more.

Start targeting gains like the ones our subscribers have seen recently, including:

213.3% GAIN on AutoNation calls
100.0% GAIN on Monster Beverage calls
100.4% GAIN on Walgreens Boots Alliance puts
100.4% GAIN on ON Semiconductor calls
257.7% GAIN on Dell calls

101.0% GAIN on Apollo Global Management calls
103.6% GAIN on JP Morgan  Chase calls
105.3% GAIN on DraftKings calls
101.3% GAIN on Airbnb calls
203.0% GAIN on Shopify calls
102.0% GAIN on Cboe Global Markets calls
100.9% GAIN on Boeing calls
102.1% GAIN on Microsoft puts
102.3% GAIN on First Solar calls
101.5% GAIN on PulteGroup calls
101.0% GAIN on Apple calls
209.4% GAIN on NXP Semiconductors calls
100.8% GAIN on Uber Technologies calls
100.4% GAIN on Academy Sports and Outdoors puts
102.2% GAIN on Trade Desk calls
100.8% GAIN on DoorDash calls
100.0% GAIN on Camping World Holdings puts
100.0% GAIN on Cboe Global Markets calls
100.2% GAIN on C3.ai calls
238.5% GAIN on Oracle calls



Rainmaker Ads CGI