World Wrestling Entertainment, Inc. (WWE) Option Bears Ignore Record-Setting Wrestlemania

World Wrestling Entertainment, Inc. (NYSE:WWE) shares are climbing thanks to a record-setting Wrestlemania

Apr 4, 2016 at 2:42 PM
facebook twitter linkedin

While new World Heavyweight Champion Roman Reigns celebrates his new title, World Wrestling Entertainment, Inc. (NYSE:WWE) shareholders are celebrating a record attendance for last night's Wrestlemania 32. The stock is 4.8% higher at $18.14 -- though the shares remain in the $16-$19 range that's mostly contained them since early November. Elsewhere, options volume is soaring, and it appears traders are skeptical of WWE's rally. 

By the numbers, more than 6,400 WWE put options have crossed -- eight times the expected intraday volume. Most of the action has taken place at the April and May 18 strikes. All signs point to the initiation of long positions, meaning traders are betting on the shares falling back below $18 before the expiration dates at the close on Friday, April 15, and Friday, May 20. 

This activity goes against what's normally seen from the stock's options traders. For instance, WWE's 10-day call/put volume ratio at the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) comes in at 3.20 -- in the 72nd percentile of its annual range
The stock's Schaeffer's put/call volume ratio (SOIR) of 1.12 echoes this call-focused approach, too, since it's lower than 86% of readings from the past year. 

Outside the options pits, WWE has attracted heavy pessimism ahead of this afternoon's post-Wrestlemania conference call. In fact, at 8.9 million shares, short interest on the stock is now at an all-time high. Even more shocking, it'd take these bears over 19 sessions to buy back their positions, at average daily volumes. 

As mentioned, World Wrestling Entertainment, Inc. (NYSE:WWE) has mostly traded within a tight $3 range during the past few months. Looking back further, though, the shares have gained almost 36% in the past 12 months. What's more, WWE's recent pullbacks have been contained by the stock's 60-day moving average. 

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.


If you are not making money with options, you aren’t buying options like this…

There is no options strategy that more perfectly approaches trading the fastest moving and most volatile stocks available in the marketplace than this one. In fact, there is no strategy that better utilizes put options for optimal returns and a real trading edge over other traders in the exact same market. New options traders fail out at an incredible rate without proper trade research, execution timing, and option picking. Capitalize on Schaeffer’s 100+ years of options trading excellence with the most coveted product launch in company history. Don't waste another second... join us right now before the next round of trades are released!



Special Offers from Schaeffer's Trading Partners