Puts Popular During HIIQ Stock Sell-Off

HIIQ put buying has been popular lately

Josh Selway
Nov 5, 2018 at 2:06 PM
facebook twitter linkedin


Health Insurance Innovations Inc (NASDAQ:HIIQ) is trading sharply lower today after the company announced it ended its relationship with Simple Health, though it added the split wouldn't change its current-quarter outlook. HIIQ stock is down 14% today at $39.76, putting it on pace for its lowest close since early August, and it's now roughly 2 points from the 200-day moving average, which it hasn't touched since early May. Meanwhile, options traders are betting on more downside.

hiiq stock chart

So far today more than 4,500 put options have traded, pacing for the 100th annual percentile. Seven of the 10 most popular options are puts, and a large portion of the activity has taken place at the November 40 put. All signs point to buy-to-open activity here, meaning traders think HIIQ shares will fall further below $40 in the coming weeks, with the front-month contracts set to expire at the close on Friday, Nov. 16.

Put buying had actually been popular even before today, though not at these rates. Data from the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) shows a 10-day put/call volume ratio of 1.26, which ranks in the 85th annual percentile.

Short interest is also high, accounting for more than 27% of the total float after a 15% increase in the last two reporting periods -- though today the security is on the short-sale restricted list. However, analysts remain upbeat, with all six recommending HIIQ shares as a "buy" or "strong buy." Overall, Health Insurance Innovations stock is up nearly 60% this year.


A Schaeffer's exclusive!

The Expert's Guide

Access your FREE trading earnings guide for Q3 before it's too late!


  
 

Partnercenter