Options Traders Bet on a FireEye Inc (FEYE) Breakout

FireEye Inc (FEYE) options traders are targeting the $20 with the stock back above its 40-day moving average

Apr 22, 2016 at 12:00 PM
facebook X logo linkedin


Cybersecurity stock FireEye Inc (NASDAQ:FEYE) has jumped 5.9% to $17.84 amid heavy volume, following an upgrade to "positive" at OTR Global. What's more, activity has picked up in FEYE's options pits, where it appears traders are betting on the stock breaking out to the upside over the next two weeks. 

More specifically, FEYE call options are trading at four times the average intraday pace, outstripping puts by a 6-to-1 margin. Weekly options account for the top 10 most popular strikes, with possible buy-to-open activity taking place at the weekly 5/6 20-strike call. Any trader initiating long positions here is betting on FEYE topping $20 by expiration at the close on Friday, May 6 -- a time frame that neatly encompasses the company's first-quarter earnings report, scheduled for the evening of Thursday, May 5. 

Call buyers have had their sights set on FEYE for a while, though. For instance, more than five calls have been bought to open for every put during the past two weeks at the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX). The resulting call/put volume ratio of 5.11 lands in the 83rd percentile of its annual range, meaning this interest in calls over puts is unusual. 

It's not a bad time to buy premium on FEYE options, either. The stock's Schaeffer's Volatility Index (SVI) of 74% ranks in the bottom third of all readings taken in the past 12 months. Said differently, the stock's near-term options are attractively priced, from a volatility perspective. 

On the charts, FireEye Inc (NASDAQ:FEYE) has surged more than 57% since hitting a record low of $11.35 in mid-February, and  with earnings approaching, the stock may be set to make another outsized move. For instance, FEYE has averaged a 12.3% swing in the session immediately following an earnings release, going back eight quarters. As for today's surge, bulls should be happy to note that the stock is attempting to take back its rising 40-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.


 

Target Effortless Triple-Digit Gains Every Sunday Evening For Life!

This is your chance to triple your profit potential on Sunday evenings, without spending all your free time watching the market.

On Sundays, as a Weekend Plus subscriber, you’ll get up to 6 trades every Sunday, each targeting gains of 200% or more.

Start targeting gains like the ones our subscribers have seen recently, including:

213.3% GAIN on AutoNation calls
100.0% GAIN on Monster Beverage calls
100.4% GAIN on Walgreens Boots Alliance puts
100.4% GAIN on ON Semiconductor calls
257.7% GAIN on Dell calls

101.0% GAIN on Apollo Global Management calls
103.6% GAIN on JP Morgan  Chase calls
105.3% GAIN on DraftKings calls
101.3% GAIN on Airbnb calls
203.0% GAIN on Shopify calls
102.0% GAIN on Cboe Global Markets calls
100.9% GAIN on Boeing calls
102.1% GAIN on Microsoft puts
102.3% GAIN on First Solar calls
101.5% GAIN on PulteGroup calls
101.0% GAIN on Apple calls
209.4% GAIN on NXP Semiconductors calls
100.8% GAIN on Uber Technologies calls
100.4% GAIN on Academy Sports and Outdoors puts
102.2% GAIN on Trade Desk calls
100.8% GAIN on DoorDash calls
100.0% GAIN on Camping World Holdings puts
100.0% GAIN on Cboe Global Markets calls
100.2% GAIN on C3.ai calls
238.5% GAIN on Oracle calls

 
 
 


 
 

Rainmaker Ads CGI