There's been unusually high interest in out-of-the-money MBLY call options in recent weeks
Self-driving technology developer
Mobileye NV (NYSE:MBLY) has been a long-time favorite of bullish options traders. MBLY call open interest currently ranks just 4 percentage points from a 12-month high, with heavy buy-to-open activity taking place during the past two weeks at the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX). The shares boast a 10-day call/put volume ratio across these exchanges of 4.31, which outstrips more than fourth-fifths of comparable readings from the past year. Said simply, there's been a very unusual bullish bias toward MBLY options.
Going by increases in open interest, the April 55 call saw the most action during this two-week time frame, and data from the major exchanges confirms mostly buy-to-open activity. Further down on the list, the April 60 call also saw heavy attention from buyers. With Mobileye stock last seen hovering 1.8% higher at $47.07, these options traders are betting on a substantial move in the weeks ahead.
This trend is only intensifying in today's trading, with MBLY calls crossing at nearly twice the normal intraday pace. In the lead is the March 60 call, where it looks like traders are purchasing new positions. As such, these bulls are hoping for the shares to climb more than 27% in just over a week, since the contracts expire at the close next Friday, March 17.
Considering how far out of the money these calls are, and MBLY's elevated
short-interest levels, it's possible some of this activity is from short sellers hedging against a sharp upside move in the near term. On the other hand, the stock has been on fire since bottoming at $33.69 in late December, gaining nearly 40%, so these options traders could indeed be "vanilla" bulls looking for extended upside.
Either way, it's an attractive time to buy Mobileye NV (NYSE:MBLY) options. Our Schaeffer's Volatility Scorecard (SVS) for MBLY comes in at 74, pointing to the stock's tendency to exceed volatility expectations during the past year. On top of this, the shares have a Schaeffer's Volatility Index (SVI) of 38%, which ranks in the low 8th percentile of its annual range, telling us volatility expectations are rather muted on near-term options at the moment.
Stay in the loop with stocks on the move. Sign up now for Schaeffer's Midday Market Check.