Fitbit Inc (FIT) Bulls Step Up as Shares Surge

Fitbit Inc (NYSE:FIT) option bulls are looking for a big finish to the week

by Josh Selway

Published on Mar 11, 2016 at 1:59 PM

Fitbit Inc (NYSE:FIT) is looking to end the week on a high note, adding 6.4% at $14.39. The stock has now added 11.9% week-to-date, with some attributing its sudden success to a round of short covering -- which is certainly possible, since over 19% of the FIT's float is sold short. Regardless, option traders are striking while the iron's hot.

FIT calls are crossing at twice the average intraday pace today, and volume could potentially set an annual high. In fact, the 10 most popular options are all calls, and the weekly 3/11 14.50 strike is leading the way. Data suggests the options are being bought to open, as traders bet on FIT topping $14.50 by today's close. The stock topped out at an intraday high of $14.52 around 11:30 a.m. ET.

This preference for long calls is nothing new, though. FIT's 10-day call/put volume ratio at the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) stands at 17.99. In other words, almost 18 calls have been bought to open for every put during the past two weeks. What's more, call open interest triples put open interest among options set to expire within three months, according to FIT's Schaeffer's put/call open interest ratio (SOIR)

Looking back, Fitbit Inc (NYSE:FIT) has struggled on the charts. The shares hit an all-time low of $11.91 last month, and the recent rebound is running out of steam near their 30-day moving average -- a trendline that has ushered FIT lower since early November.

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