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 twitter 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



Minimize Risk While Maximizing Profits

There is no options strategy like this one, which consistently minimizes risk while maintaining maximum profits. Perfect for traders looking for ways to control risk, reduce losses, and increase the likelihood of success when trading calls and puts. The Schaeffer’s team has over 41 years of options trading success targeting +100% gains on every trade. Rest assured your losses are effectively limited to your initial cost at the time of making your move! Don't waste another second... join us right now before the next trade is released! 



Special Offers from Schaeffer's Trading Partners