Yahoo! Inc. (YHOO) Option Bull Buys More Time

It looks as if one Yahoo! Inc. (NASDAQ:YHOO) option trader rolled her bullish May bet out to the June series

by Karee Venema

Published on Apr 8, 2016 at 11:33 AM
Updated on Apr 8, 2016 at 11:36 AM

Yahoo! Inc. (NASDAQ:YHOO) is reportedly giving firms an extra week to bid on its businesses, extending the deadline to April 18 from April 11. The list of potential suitors for YHOO is long, and apparently includes such notable names as Verizon Communications Inc. (NYSE:VZ), Alphabet Inc (NASDAQ:GOOGL), and Time Inc (NYSE:TIME). Meanwhile, in the stock's options pits, it looks as if one trader is giving her bullish position a little more time, as well, with a big roll eyed in YHOO's May and June series.

Taking a quick step back, around 56,000 YHOO call options have changed hands today. This is about three times what's typically seen at this point in the day, and nearly 10 times the number of put options that have traded.

A large portion of today's volume is the result of a 10,000-contract block of May 35 calls and an 8,758-contract lot of June 35 calls that changed hands simultaneously. According to Trade-Alert, it looks as if this action is the result of one trader rolling her in-the-money May calls out to the June series.

Widening the sentiment scope reveals call buying has been a popular strategy on YHOO in recent weeks. At the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), for instance, YHOO's 10-day call/put volume ratio of 5.43 sits just 9 percentage points from a 52-week peak.

Echoing this call-skewed slant is YHOO's Schaeffer's put/call open interest ratio (SOIR) of 0.33. Not only does this show that calls more than triple puts among options expiring in three months or less, but it ranks lower than 96% of all comparable readings taken in the past year. In other words, short-term speculators have rarely been as call-heavy toward YHOO as they are now.

On the charts, the stock has been rallying since hitting a two-year low of $26.15 in mid-February, with shares of Yahoo! Inc. (NASDAQ:YHOO) up almost 39% to $36.24. What's more, YHOO is comfortably on pace to notch a second straight weekly close north of its 50-week moving average -- a feat not accomplished since last May.

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