Put Trading Picks Up on SeaWorld After Orca Death

Puts are crossing at twice the expected rate today

Jan 29, 2019 at 2:15 PM
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SeaWorld Entertainment Inc (NYSE:SEAS) is seeing accelerated put trading, following the sudden death of orca whale Kayla at the young age of 30. Puts are crossing at two times the expected pace, and traders seem to be buying to open positions at the June 25 put. If that's the case, these bearish traders would be betting on more losses from SEAS stock in the coming months. The stock was last seen down 3.3% at $26.36.

seas stock chart

This trading activity varies from what's been happening at the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), where more than 1,000 calls were bought during the past 10 days compared to just 205 calls. Moreover, the equity's Schaeffer's put/call open interest ratio (SOIR) of 0.14 -- which is actually an annual low -- shows a very heavy call-skew among near-term speculators.

Even with today's losses, SeaWorld stock is up roughly 19% year-to-date, and isn't sitting too far from its mid-September high of $32.47. This comes despite heavy skepticism across Wall Street, with a notable 28% of the equity's float sitting in the hands of short sellers. That being said, five of the 11 covering brokerage firms still have "strong buy" recommendations on the security, so it's not like everyone has given up on SEAS.

 

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