Altaba Stock Options Volume Pops After Yahoo Shift

AABA shareholders appear to be initiating options hedges on the stock

Jun 26, 2017 at 3:01 PM
facebook twitter linkedin


After Verizon completed its purchase of Yahoo's core operations unit, the remaining assets of the former internet name and now investment company -- which holds a sizable stake in Alibaba -- became known as Altaba Inc (NASDAQ:AABA). Since its June 19 open at $54, AABA stock has added 0.9% to trade at $54.50, and earlier hit a post-conversion high of $55.60. Altaba options volume has been on fire, too, with roughly 109,000 contracts traded on June 20 alone.

Most of the action centered at the now-expired weekly 6/23 70-strike call and put, and it looks like the action was tied to shares. Another options trader may have bet on a long-term volatility crush for Altaba shares, with the possible initiation of a short straddle using the January 2018 50-strike call and put. A similar trade was potentially placed last Thursday, June 22, using the January 2018 70-strike call and put.

In total, the October 52.50 put has seen the biggest rise in open interest over the past five days, with roughly 16,000 contracts added -- and is now home to peak open interest of 26,671 positions. Data from Trade-Alert indicates some of the activity could be a result of one AABA options trader selling to close the October 57.50 calls to fund the purchase of the new October puts.

Today, AABA options traders are taking a breather, with around 31,000 contracts traded so far -- one-third of the expected 93,000. There looks to be a possible long straddle being initiated at the January 2018 60-strike call and put, and is tied to Altaba stock.
 

Now is the time to join our thriving community of Event Traders who consistently profit from every earnings season. With this discounted subscription opportunity, you'll stay ahead of the curve and seize opportunities others miss. Do not let Q3 earnings season pass you by – subscribe now and supercharge your portfolio with expert insights that turn market reactions into profit-generating opportunities!! Don't waste another second... join us right now before the next trade targeting +200% is released!