Jumia Options Volume Pops After Another Citron Tweet

June-dated JMIA options are hot after the short seller weighed in (again)

by Andrea Kramer

Published on May 28, 2019 at 1:53 PM
Updated on Jun 24, 2020 at 10:16 AM

African e-commerce issue Jumia Technologies (NYSE:JMIA) is seeing unusual options volume today, after short seller Citron Research once again weighed in on the firm. Just a few weeks after calling JMIA stock "worthless" and accusing the company of fraud, Citron today said it now has "indisputable evidence" of "manipulated financials and FAKE ORDERS." Against this backdrop, Jumia shares are down 1.8% at $22.98.

The "Amazon of Africa" priced its initial public offering (IPO) at $14.50 in April, the mid-point of its expected range. The stock debuted in the U.S. on April 12, opening at $18.95, and peaking at $49.77 five days later. More recently, though, JMIA shares touched a record low of $18.13 on May 10 -- the session after the first Citron note -- and have subsequently struggled beneath the $25-$27 area, which is also home to the equity's closing price of $25.46 on its first day of trading.

JMIA stock chart may 28

At last check, the security has seen more than 8,000 calls and 6,600 puts change hands already today. For context, the stock has averaged daily volume of fewer than 3,300 calls and 4,800 puts.

Digging deeper, it looks like some speculators are shrugging off Citron's latest note, buying to open the June 25 call, which is the most popular option so far. By purchasing the calls to open, the buyers expect JMIA shares to rebound north of $25 before the options expire on Friday, June 21.

On the flip side, it appears some bears may be buying to open the June 25 put. Vanilla put buyers here expect Jumia stock to sink beneath the $25 level before the front-month options expire in a little over a month.

Although call volume is outpacing put volume so far today, near-term open interest is put-skewed. In fact, JMIA's Schaeffer's put/call open interest ratio (SOIR) stands at 1.50, indicating that put open interest is roughly 50% higher than call open interest, looking at options that expire in the next three months. The June 20 put is home to peak open interest among all series, with more than 5,300 contracts in residence.

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