FireEye Inc (FEYE) Call Buyers Take Aim at $20

FireEye Inc (FEYE) call options have been popular of late -- and today is no exception

by Alex Eppstein

Published on Mar 18, 2016 at 3:02 PM
Updated on Jun 24, 2020 at 10:16 AM

FireEye Inc (NASDAQ:FEYE) is burning up the charts today, last seen 3.6% higher at $18.60 amid unconfirmed buyout chatter. The cybersecurity stock's call options are hot, too, with 19,000 on the tape -- compared to an expected intraday amount of roughly 6,500.

The most active FEYE strike is the soon-to-be front-month April 20 call. According to the International Securities Exchange (ISE), a number of contracts are being bought to open here, as speculators foresee the stock toppling the round $20 level by the close on Friday, April 15. FEYE hasn't settled a session north of the strike since early January -- as such, delta remains a relatively slim at 0.36, or 36%.

FEYE is no stranger to call buying, per data from the ISE, Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX). The stock's 50-day call/put volume ratio across those exchanges is a top-heavy 3.44, registering above nearly three-quarters of all others readings from the prior year.

Underscoring this appetite for calls, FEYE's Schaeffer's put/call open interest ratio (SOIR) lands at 0.28. This ratio indicates short-term calls outstrip puts by a nearly 4-to-1 margin. What's more, the SOIR is higher than just 9% of comparable readings taken in the last 12 months, confirming the prevailing call bias.

Technically speaking, FireEye Inc (NASDAQ:FEYE) has done little to warrant such optimism. The stock has sold off sharply from its annual high of $55.33 last June, and is approaching a potential layer of resistance in the form of its descending 20-week moving average.

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