MMR

Options Traders Take Sides on Ciena Stock

Put options have been more popular overall in recent weeks

Nov 26, 2018 at 2:44 PM
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Ciena Corporation (NYSE:CIEN) once again showed up on Schaeffer's Senior Quantitative Analyst Rocky White's list of the 20 S&P MidCap 400 Index (MID) stocks that saw the most options activity in the past 10 days. Names highlighted yellow are new to the list. CIEN options traders have recently taken a strong interest in put options, though there's also been very notable activity on the call side, as well.

most active options nov 26

As you can see from the table, puts have out-traded calls during the past two weeks by a wide margin. Plus, Cien sports a Schaeffer's put/call open interest ratio (SOIR) of 0.98. While this still shows near-term call open interest outweighs put open interest among contracts expiring within three months, this reading ranks in the 95th annual percentile, showing the near parity between short-term puts and calls is quite rare.

Meanwhile, the biggest rise in open interest over the last 10 sessions occurred at the weekly 11/30 34-strike call, which is now the top open interest position overall. Data from the major options exchanges shows heavy buy-to-open activity here, so many traders have been betting on CIEN shares to rise above $34 by the close this Friday, when the contracts expire.

Looking outside the options pits, there's been a notable decrease in short interest recently. In the last reporting period, short interest fell by 35.6%, but 7% of the float is still held by short sellers. Considering this, there's room for more short-covering tailwinds moving forward.

That's not the only thing working in favor of Ciena. White's data also points out that the shares recently pulled back near the 80-day moving average after a lengthy stretch above it. The last six times CIEN has pulled back to this trendline, it's gone on to average a one-month advance of 4.4%. The stock was last seen trading near $31.34, up almost 50% year-to-date.

 

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