Call Options Stay Hot on Soaring Vonage Holdings Corp. (VG)

Vonage Holdings Corp. (VG) is up 10% after Craig-Hallum pointed to the telecom's "significant opportunity"

Aug 18, 2016 at 11:22 AM
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Vonage Holdings Corp. (NYSE:VG) is zooming higher today, sending intraday stock and options volume into their 100th and 99th annual percentiles, respectively. Boosting the telecom shares is a price-target hike to $10 from $8.50 at Craig-Hallum, which waxed optimistic on the "significant opportunity" VG and sector peer Twilio Inc (NYSE:TWLO) have in the expanding Communications Platform as a Service (CPaaS) market.

Diving deeper on Vonage options, calls are currently changing hands at nine times the expected intraday rate. In fact, nearly 2,400 contracts are on the tape, while not a single put option has traded. Accounting for more than half of the volume is the March 6 call, where traders may be purchasing new in-the-money positions, counting on extended gains through March 2017 expiration.

Today's call-skew is hardly unusual for VG. In fact, during the last 10 days at the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), traders have bought to open 4,670 call options versus just a single put. Likewise, the stock's Schaeffer's put/call open interest ratio (SOIR) of 0.06 ranks in the low 18th percentile of its annual range.

Options players aren't the only ones sporting a glass-half-full perspective on VG. As was clear from Craig-Hallum's bullish note, the brokerage bunch is upbeat toward the stock. Specifically, seven analysts rate the shares a "buy" or better, versus one "hold" and not a single "sell."

There's a reason for that, too. With Vonage Holdings Corp. (NYSE:VG) up 10.3% at $6.32, the stock has now soared nearly 66% since its May lows just above $3.80 -- echoing the technical trajectory of this fellow telecom titan. Plus, today's upward gap has the shares back in positive year-to-date territory, and on track for their highest close since early December.

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