Options Traders Open Puts During GOOS Stock Sell-Off

Put traders are targeting the 30 strike in the February series

Jan 24, 2019 at 12:54 PM
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Canada Goose Holdings Inc (NYSE:GOOS) is pacing for one of its worst days ever, after the winter apparel concern was cut to "market perform" from "outperform" at Wells Fargo. The analyst note called out GOOS' multinational exposure as a risk, noting that the stock is more expensive compared to right after the company went public, and that recent data from Google and Instagram during the holidays revealed a slowdown in engagement.

GOOS shares were last seen trading near session lows, down 10.7% at $44.33. The equity recently ran into its 200-day moving average, and has moved back below the $46 level, home to a June bull gap that acted as a floor during October.

canada goose stock jan 24

This price action could be bad news for recent call buyers. The stock's 10-day call/put volume ratio at the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) now stands at 5.47, and ranks in the 87th annual percentile. Said simply, call buying continues to be unusually popular on GOOS, relative to put buying.

In today's trading, call volume is ahead of put volume once again, but the most popular strike is the February 30 put. New positions are being opened here, and if buy-to-open activity is taking place, traders would be betting on the shares falling below $30 in roughly a month -- a time frame that includes the retailer's expected Feb. 6 earnings report.

This upbeat activity mirrors the attention seen from analysts, as seven out of eight in coverage had "strong buy" ratings on Canada Goose before today. On the other hand, short interest has seemingly started to pick up, growing by 13.5% in the last two reporting periods to account for almost 9% of the security's total float. However, the losses today have GOOS on the short-sale restricted list.


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