Options Traders Confident In an ILG Stock Earnings Win

Large bull spreads have been initiated on ILG in back to back days

Feb 22, 2018 at 2:32 PM
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Leisure stock ILG Inc (NASDAQ:ILG) is trading 0.8% higher today at $32.56, putting it just below Tuesday's record high of $32.75. The shares have already added over 14% in 2018 and the company just announced it's raising its quarterly dividend by almost 17%. Looking ahead, ILG is scheduled to report earnings after the close next Wednesday, Feb. 28, and options traders have been scooping up calls at a mind-blowing pace.

In fact, more than 34,000 calls have been bought to open during the past two weeks at the International Securities Exchange (ISE), Chicago Board Options Exchange (Cboe), and NASDAQ OMX PHLX (PHLX), compared to just 829 puts. According to Trade-Alert, this is the second day in a row that ILG has seen notable bullish spread activity, with heavy volume taking place at the April 34 and 39 calls.

Looking closer at the front-month March series, there's significant open interest at the 30, 32, and 33 calls. Despite this interest in calls, ILG has a 30-day implied volatility (IV) skew of 5.8%, ranking in the 87% annual percentile. This means volatility expectations priced into put options are actually much higher than normal when compared to calls.

Finally, it's worth noting the stock has caught the attention of short sellers. In the past two reporting periods alone short interest surge over 56%. The security now has a healthy short-interest ratio of 3.60. For what it's worth, ILG shares gained 2.3% in the session after earnings this time last year.
 

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