Inside Today's $500K Mobileye NV (MBLY) Options Bet

One options trader bought to open 1,850 May 40 puts on Mobileye NV (MBLY) ahead of next week's earnings report

by Alex Eppstein

Published on Apr 25, 2016 at 2:48 PM

Mobileye NV (NYSE:MBLY) puts are flying off the shelves once again today, at double the expected intraday rate, and triple the speed of calls. The most active strike is the May 40 put, and it looks like one options trader bought to open a sweep of 1,850 contracts for $2.90 apiece -- or a total of $536,500 (premium paid * number of contracts * 100 shares per contract). According to Trade-Alert, this may be the work of a MBLY shareholder hedging his long stock position against a post-earnings move lower after next Thursday morning's report.

Taking a step back, options traders have been extremely bearish toward shares of the auto technology firm. In fact, MBLY's 10-day International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) put/call volume ratio comes in at an annual high of 5.65. Underscoring this put bias, the stock's Schaeffer's put/call open interest ratio (SOIR) of 2.42 rests just 8 percentage points from a 12-month peak.

Outside of the options pits, short sellers have also been piling on MBLY's bearish bandwagon. Over 22% of the stock's float is sold short, which would take 12.5 sessions to cover, at its typical daily trading levels. In fact, one famous short-selling firm recently described MBLY as the "most outrageously overpriced, overhyped semiconductor stock ever."

Technically speaking, Mobileye NV (NYSE:MBLY) has been a mixed bag in 2016. Year-to-date, the stock is off 8.8% at $38.55 -- including a 2.2% drop today. On the other hand, MBLY had been bouncing back since touching a record low of $23.57 in early February.

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