MMR

LOCO Put Traders Rush In During Pullback

El Pollo LoCo still sports a strong year-over-year lead

Feb 13, 2019 at 2:26 PM
facebook X logo linkedin


It seems a Seeking Alpha article deeming El Pollo LoCo Holdings, Inc. (NASDAQ:LOCO) "uninvestible" is sinking the stock today. LOCO shares were last seen down 3.7% at $14.74, and put volume has exploded, with nearly 6,000 contracts crossing so far, compared to a daily average of just 162. Signs point to buy-to-open activity at the February 15 and March 13 puts, the two most popular options today. These bears would be betting on more downside for the restaurant concern in the coming weeks.

Near-term options traders were already put-heavy on LOCO, according to the equity's Schaeffer's put/call open interest ratio (SOIR) of 1.48, which ranks in the 68th annual percentile. This is due to heavy accumulation at the March 15 put, where 3,642 contracts reside, compared to just 964 at the next closest contract.

Meanwhile, short interest keeps climbing on El Pollo LoCo, jumping 55.3% in the last two reporting periods. This puts 11% of the stock's total float in the hands of short sellers, or almost four times the average daily trading volumes.

Today's pullback has the stock hovering near a trendline connecting higher lows over the past year, and accelerates the losses that have occurred since the shares' Jan. 23 multi-year peak of $18.47. All the same, LOCO sports a one-year lead of roughly 58%.

loco stock chart

 

 

AI has exploded ever since ChatGPT set the world on fire near the end of 2022.

Numerous companies with connections to artificial intelligence have seen their stocks soar.

That includes Nvidia, the poster boy of AI.

Its stock has skyrocketed 716% since ChatGPT’s debut. But here’s the thing …

While everyone’s still counting their money from this first AI boom … Nvidia and countless others have moved on to the next stage.

That includes Big Tech, which is currently making a series of peculiar investments in a few strange companies. This has nothing to do with tech. At least on the surface …

Yet, these strange investments could be the early ripples of a massive wave …Without them, ChatGPT could stop operating … Amazon, Google, Microsoft and more could see profits drop drastically.

In fact, Elon Musk says these investments are critical when it comes to solving the number one problem facing AI.

Now, Silicon Valley legend Michael Robinson has identified two companies that could play a significant role in the solution.

Their stocks just may be the key to AI 2.0.

Find out more about these two companies today.
 (ad)