Oprah Lifts Weight Watchers International, Inc. (WTW) Yet Again; Call Volume Pops

An Oprah tweet has Weight Watchers International, Inc. (NYSE:WTW) surging

Jan 26, 2016 at 2:38 PM
facebook twitter linkedin


Oprah's moving markets again. The media celebrity took to Twitter to promote Weight Watchers International, Inc. (NYSE:WTW) and its pro-bread stance, and now shares of the weight-loss company are up 20.4% at $13.39. In the video that has caused the stock's surge, Oprah says she's lost 26 pounds on a WTW program, despite eating bread every day. 

In the meantime, activity has picked up in the stock's option pits. Calls are trading at almost twice the average intraday pace, with buy-to-open activity likely at several strikes in the weekly 1/29 series, as traders bet on extended gains from WTW before the contracts expire at the end of the week. The most popular front-month option, meanwhile, is the February 16 strike call. It looks like speculators are purchasing bullish positions here, as well, in anticipation of the shares taking out $16 before options expiration, at the close on Friday, Feb. 19. WTW traded above $16 as recently as Jan. 13. 

On the whole, WTW calls have outpaced puts today by 10,000 to 1,629, which is quite unusual. In fact, over the past 10 sessions, more puts have been bought to open than calls across the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX). This is according to the stock's 10-day put/call volume ratio of 1.07. 

Elsewhere, short sellers have been entering the picture. Specifically, short interest jumped by almost 21% during the previous two-week reporting period to nearly 14 million shares. However, it would take short sellers fewer than three days to cover their positions, at normal daily volumes. 

Looking over to the charts, it's no secret Oprah's investment last year was a boon for Weight Watchers International, Inc. (NYSE:WTW), with the shares jumping from $6.79 prior to the announcement, to as high as $28.05 in November. However, this technical success was short-lived, with a fundamental mishap accelerating the stock's sell-off this month. Over the past two months, WTW has underperformed the S&P 500 Index (SPX) by over 53 percentage points. 

Sign up now for Schaeffer's Market Recap to get all the day's big stock movers, must-know technical levels, and top economic stories straight to your inbox.

Winning With Weekly Options

1606854690

  


 
Special Offers from Schaeffer's Trading Partners