Options Bulls Blitz Under Armour Stock After New High

The retail stock is on track for its longest daily win streak since February

Jun 6, 2018 at 2:54 PM
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Under Armour Inc (NYSE:UAA) is trading up 1.2% at $23.82 -- fresh off an annual high of $24.61 -- riding recent momentum sparked in part by news that the company's limited release of The Rock's Project Rock 1 shoes sold out within 30 minutes over the Memorial Day weekend. UAA's options pits are buzzing, too, with speculators targeting even higher highs for the retail stock.

At last check, around 13,500 calls and 6,000 puts have changed hands on UAA -- two times what's typically seen. While the July 22.50 call is most active, it looks like traders may be liquidating positions here. However, it looks like new positions are being purchased at the July 30 call for a volume-weighted average price of $0.14, making breakeven for the put buyers at back-month expiration $30.14 (strike plus premium paid).

Call buying has been extraordinarily popular in recent weeks. At the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE) and NASDAQ OMX PHLX (PHLX), UAA's 10-day call/put volume ratio of 3.34 ranks in the 89th annual percentile, meaning calls have been bought to open over puts at a quicker-than-usual clip.

Given the stock's technical tenacity, the bulk of this heavy call buying is likely at the hands of bullish bettors. However, it's possible shorts have been hedging their bearish positions against any additional upside risk. Short interest jumped 5.1% in the most recent reporting period to 64.01 million shares -- representing 17.3% of Under Armour's available float, or 10.6 times the average daily pace of trading.

On the charts, today's positive price action is just more of the same for the athletic apparel retailer. UAA shares have surged 50% since bouncing off their 200-day moving average in mid-April, and are now on track for their fourth straight gain -- their longest winning streak since February.

uaa stock daily chart jun 6

 

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