Tilray Options Volume Explodes Ahead of Earnings

TLRY stock hit a record high earlier

Aug 27, 2018 at 12:40 PM
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The shares of Tilray Inc (NASDAQ:TLRY) are soaring today -- up 20% at $52.57, and fresh off a record high of $54.16 -- on news the company will supply Nova Scotia Liquor with adult-use cannabis products. Options traders are continuing to blast TLRY stock, too, and it looks like some are taking advantage of elevated volatility levels ahead of the company's earnings report -- due after the close tomorrow, Aug. 28.

At last check, 7,640 calls and 3,984 puts have changed hands on Tilray -- 12 times what's typically seen at this point in the day, and total options volume at a new record high. Most active is the September 60 call, where it looks like new positions are being sold to open.

While this would suggest call writers are setting a near-term ceiling at the round $60 mark, it's also possible they're hoping for a post-earnings volatility crush. TLRY stock's 30-day at-the-money implied volatility is perched at an all-time peak of 123.3%, meaning lofty volatility expectations are being priced into short-term options.

More broadly speaking, TLRY speculators have shown a preference for long calls over puts at the major options exchanges. Amid relatively low absolute volume, traders at the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) have bought to open 2.82 calls for each put over the last two weeks.

Technically speaking, U.S.-listed Tilray shares have been flying higher since they began trading on the Nasdaq six weeks ago. Specifically, TLRY stock has gained 129% since its July 19 open at $23.05, and has more than tripled from its initial public offering price (IPO) of $17 per share.

tilray stock daily chart aug 27


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