MakeMyTrip Limited (MMYT) Options Volume Explodes On Buyout Buzz

MakeMyTrip Limited (MMYT) option traders are making a rare appearance, after the company said it will purchase rival ibibo Group

by Celeste Taylor

Published on Oct 18, 2016 at 3:11 PM
Updated on Jun 24, 2020 at 10:16 AM

Indian travel website MakeMyTrip Limited (NASDAQ:MMYT) announced that it will purchase sector peer ibibo Group in an all-stock deal that reportedly values the combined company at roughly $1.5 billion. After being halted earlier, MMYT has skyrocketed -- up 53% at $31.20, and fresh off a two-year high of $31.90 -- with both stock and options volume soaring.

With roughly 6 million MMYT shares traded at last check, stock volume has nearly tripled its previous annual high of 2 million shares, set on Jan. 8. Meanwhile, in the option pits, volume is running at 58 times its usual intraday pace. Although with just 1,857 contracts on the tape -- also a 52-week peak -- volume is still light on an absolute basis.

Drilling down even more, puts are trading at 241 times what's typically seen at this point in the day, and the 724 contracts that have changed hands easily surpass the previous annual high of 405 puts, notched on Nov. 17. Calls still outnumber puts, however, with 1,133 contracts traded at last check -- and call volume on track to notch a 12-month high of its own.

Even before today's surge, MMYT's near-term option traders were already call-biased. The stock's Schaeffer's put/call open interest ratio (SOIR) of 0.27 sits lower than 93% of all other readings from the past 12 months, indicating calls almost quadruple puts among options set to expire in three months or less. Nevertheless, even the most populated strike on MakeMyTrip Limited's (NASDAQ:MMYT) -- the November 22.50 call -- is home to fewer than 750 contracts outstanding.

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