Pre-Earnings Option Bulls Line Up for Gogo Inc (GOGO)

Gogo Inc (GOGO) will report first-quarter earnings tomorrow morning

May 5, 2016 at 2:13 PM
facebook X logo linkedin

Gogo Inc (NASDAQ:GOGO) has seen its stock price and options volume spike ahead of tomorrow morning's earnings report. At last check, shares of the in-flight Internet provider are up 3.7% at $10.52 on heavy volume. Likewise, GOGO options are changing hands at 1.8 times the usual intraday rate -- though volume remains low on an absolute basis.

The most active option is the weekly 5/6 10.50-strike call. Traders have been buying to open the options, wagering on GOGO extend its newfound lead over this strike by tomorrow's closing bell, when the series expires.

This is just more of the same for a stock that has seen 14.61 calls bought to open for every put during the past four weeks at the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX). Echoing this, GOGO's Schaeffer's put/call open interest ratio (SOIR) of 0.48 checks in below 89% of comparable readings from the prior year, with short-term calls doubling puts.

It's possible call buyers are are short sellers in disguise, though. Specifically, with 34.5% of GOGO's float sold short -- an amount that would take four weeks to cover, at the stock's typical trading volumes -- short sellers may have purchased calls to hedge against an unforeseen rally in the shares.

On the other hand, the brokerage bunch is clearly on the bullish side of the fence. Two-thirds of the analysts tracking GOGO rate it a "buy" or better. Plus, the stock's average 12-month price target of $16.17 represents 54% upside to current levels.

Of course, sentiment could swing dramatically following tomorrow's earnings report. Gogo Inc (NASDAQ:GOGO) has moved an average of 6.1% in the session after its last eight quarterly events -- with four to the upside, and four to the downside. This time around, the options market is pricing in a much bolder one-day swing of 18.8%.

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 calls
238.5% GAIN on Oracle calls



Rainmaker Ads CGI