TAL Education Puts Hot After Muddy Waters Yells 'Fraud'

TAL stock is short-sale restricted today

Jun 13, 2018 at 2:59 PM
facebook X logo linkedin

Muddy Waters issued a scathing note on TAL Education Group (NYSE:TAL) earlier, saying the Chinese after-school tutoring firm was a fraud that "overstated net income by at least 43.6%," and comparing the company to Enron. Carson Block said the investment research company was short TAL stock, and in reaction, the shares have plunged 8.7% to trade at $41.68 -- and options traders are piling on.

At last check, nearly 57,000 puts and roughly 19,000 calls are on the tape -- almost 16 times what's typically seen at this point in the day, and total options volume is at a new 52-week peak. Most active are the June 35 and 40 puts, where it looks like new positions are being purchased. If this is the case, speculators are betting on bigger short-term losses for TAL -- possibly looking for alternative ways to bet bearishly on a stock that's on the short-sale restricted list.

This put-heavy trading is just more of the same for TAL options traders. At the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), the equity's 10-day put/call volume ratio of 1.20 ranks in the 83rd annual percentile, meaning puts have been bought to open over calls at a quicker-than-usual clip.

Today's negative price action runs counter to the equity's longer-term uptrend. Heading into the session, TAL shares were boasting a 54% year-to-date lead. In fact, the equity topped out at a record high of $47.63 just yesterday. As such, some of the recent put buying could be at the hands of shareholders looking to protect portfolios against downside risk.


Target Effortless Triple-Digit Gains Every Sunday Evening For Life!

This is your chance to triple your profit potential on Sunday evenings, without spending all your free time watching the market.

On Sundays, as a Weekend Plus subscriber, you’ll get up to 6 trades every Sunday, each targeting gains of 200% or more.

Start targeting gains like the ones our subscribers have seen recently, including:

213.3% GAIN on AutoNation calls
100.0% GAIN on Monster Beverage calls
100.4% GAIN on Walgreens Boots Alliance puts
100.4% GAIN on ON Semiconductor calls
257.7% GAIN on Dell calls

101.0% GAIN on Apollo Global Management calls
103.6% GAIN on JP Morgan  Chase calls
105.3% GAIN on DraftKings calls
101.3% GAIN on Airbnb calls
203.0% GAIN on Shopify calls
102.0% GAIN on Cboe Global Markets calls
100.9% GAIN on Boeing calls
102.1% GAIN on Microsoft puts
102.3% GAIN on First Solar calls
101.5% GAIN on PulteGroup calls
101.0% GAIN on Apple calls
209.4% GAIN on NXP Semiconductors calls
100.8% GAIN on Uber Technologies calls
100.4% GAIN on Academy Sports and Outdoors puts
102.2% GAIN on Trade Desk calls
100.8% GAIN on DoorDash calls
100.0% GAIN on Camping World Holdings puts
100.0% GAIN on Cboe Global Markets calls
100.2% GAIN on C3.ai calls
238.5% GAIN on Oracle calls



Rainmaker Ads CGI