Options Traders Blitz Hasbro, Mattel Ahead of Christmas

Both Hasbro, Inc. (NASDAQ:HAS) and Mattel, Inc. (NASDAQ:MAT) are seeing accelerated options trading ahead of the Christmas holiday

Dec 19, 2016 at 11:25 AM
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Christmas is less than a week away. As the broader stock market spreads holiday cheer ahead of the long weekend, a dismal outlook for JAKKS Pacific, Inc. (NASDAQ:JAKK) has shares of the toy maker spiraling. As such, fellow toy stocks Hasbro, Inc. (NASDAQ:HAS) and Mattel, Inc. (NASDAQ:MAT) are both trading lower today, although HAS has come off its earlier lows. Options traders, meanwhile, are blasting the relatively lightly traded options pits of both HAS and MAT ahead of the Christmas holiday, while short sellers could be keeping a close eye on the near-term price action.

HAS, for instance, was last seen trading down 0.4% at $80.51 -- and earlier fell as low as $78.75, before bouncing off its 320-day moving average. Longer term, the stock is hovering around its 20% year-to-date breakeven mark, with the round $80 proving formidable as both support and resistance throughout 2016.

However, it's been the $92.50 level HAS options traders have targeted, with the April 92.50 call home to peak open interest of 1,713 contracts outstanding. This strike is the most active HAS option today, with the 708 contracts traded here accounting for 65% of the stock's elevated intraday call volume -- running at 12 times the average intraday rate. However, it looks like some of the activity could be of the sell-to-close kind.

Outside of the options pits, however, short interest has more than doubled since hitting a five-year low in mid-July. Now, with 7.7 million Hasbro, Inc. shares sold short, it would take roughly eight sessions to cover these bearish bets, at the stock's average pace of trading. Should HAS take a bigger bounce off support and resume its longer-term uptrend, a short-covering rally could boost the shares even higher.

Elsewhere, MAT is down 0.1% at $28.78. Since hitting an annual high of $34.76 in mid-April, the stock has now surrendered more than 17%. An unusual batch of put players are blitzing MAT today, meanwhile, with 838 contracts traded thus far -- four times what's typically seen at this point in the day.

Short sellers have lately been jumping ship on Mattel, Inc., with short interest down nearly 41% year-to-date. Analysts are mostly upbeat, too, with 58% maintaining a "strong buy" recommendation, and not a single "sell" to be found. Should MAT continue to struggle, a renewed build of short interest and/or a round of downgrades could pressure the shares even lower.

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