Call Buyers Blast Stitch Fix Stock Amid Oprah Rumors

SFIX call buying was popular even before today, however

Jun 20, 2018 at 2:57 PM
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Stitch Fix Inc (NASDAQ:SFIX) stock traded as high as $29.93 earlier, thanks to rumors that Oprah Winfrey was considering taking a stake in the company -- rumors that have since been denied. Nonetheless, SFIX stock is still up 4.1% to trade at $27.34, and options are trading at a blistering pace, as a number of traders bet on more upside from the shares in the coming weeks.

At last check, more than 15,000 call options had traded today -- a new high -- compared to just about 1,000 puts. The average daily call volume for SFIX, for what it's worth, is only 3,362 contracts. Traders are hammering calls in the July series, with positions opening at the 26, 27, 29, and 30 strikes. Those buying to open the calls are betting on the stock pushing higher before the front-month options expire at the close on Friday, July 20.

But looking back, Stich Fix call buying had been very popular even before today. Data from the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) shows a 10-day call/put volume ratio of 4.72, meaning almost five calls have been bought to open for every put during the past two weeks. During that time, the July 27 call saw the largest increase in open interest during that time, and data shows almost exclusive buy-to-open activity there.

It's hard to blame anyone for being bullish on Stitch Fix stock after the company's earnings release earlier this month. But while SFIX has rallied more than 43% in June alone, it may have trouble overcoming the $30 level that acted as a ceiling back in December, and is roughly double the SFIX close from its first day of public trading back in November.

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