Palo Alto Networks Inc (PANW) Options Hot After Cramer Callout

Palo Alto Networks Inc (NYSE:PANW) is rallying today after being mentioned on "Mad Money"

by Karee Venema

Published on Jan 29, 2016 at 1:43 PM
Updated on Jun 24, 2020 at 10:16 AM

Palo Alto Networks Inc (NYSE:PANW) options pits are hopping today, after the stock was mentioned on CNBC's "Mad Money" with Jim Cramer. At last check, overall volume was running at two times what's typically seen at this point in the day, with calls having a healthy lead over puts.

PANW's most active option this afternoon is the weekly 1/29 152.50-strike call, where new positions are possibly being purchased. In other words, it appears eleventh-hour speculators are betting on a bigger rally through tonight's close.

Elsewhere, longer-term traders have honed in on PANW's March 110 call. It looks as if some speculators are buying to open these deep in-the-money calls for a volume-weighted average price (VWAP) of $42.05, making breakeven $152.05 (strike plus VWAP).

From a wider sentiment perspective, today's call-skewed session is just more of the same. At the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), for instance, PANW's 10-day call/put volume ratio of 1.66 ranks in the 87th annual percentile. In other words, calls have been bought to open over puts at a faster-than-usual clip.

Echoing this is the equity's Schaeffer's put/call open interest ratio (SOIR) of 0.76, which sits lower than 67% of all comparable readings taken in the past year. Simply stated, short-term speculators are more call-heavy than usual toward PANW.

Option bulls are likely cheering today's run higher, considering the stock was staring at a 20.6% year-to-date deficit heading into the session. Specifically, shares of a Palo Alto Networks Inc (NYSE:PANW) are up 5.5% at $147.42, after being called out by Jim Cramer. While the focus of the episode was Facebook Inc's (NASDAQ:FB) outstanding earnings, Cramer noted PANW is a "high-multiple, speculative stock" that he would like to see bounce back before he would recommend it as a "buy."

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