Snap's Latest Surge Draws Fresh Batch of Bulls

Snap calls have been popular in recent weeks

Jun 4, 2019 at 2:50 PM
facebook twitter linkedin

Snap Inc (NYSE:SNAP) is up 8% at $12.63 this afternoon. While there's no specific catalyst, the social media stock could be benefiting from a broad-market rally, or possibly a round of short covering, considering 7.6% of its float is controlled by bearish bettors. Whatever the reason, options are running hot, with most of the action being driven by bullish traders.

At last check, around 105,000 calls and 38,500 puts have changed hands, more than three times what's typically seen at this point in the session. The weekly 7/12 13.50-strike call is most active, due in part to a 5,959-contract block that Trade-Alert indicates was bought to open for roughly $231,805 (number of contracts * $0.389 premium paid * 100 shares per contract).

This initial cash outlay also represents the maximum risk on the trade, and will be surrendered if SNAP stock settles below $13.50 at the close on Friday, July 12, when the weekly options expire. Profit, meanwhile, will accumulate on a move above breakeven at $13.89 (strike plus premium paid).

Call buying has already been a popular options strategy on Snap, as the equity extends its recent bounce off the round $10 level. Since bottoming at a near-term low of $10.04 on May 13 -- just above its 80-day moving average -- the shares have rallied 25.8%, and are on track for their fourth straight win. Longer term, the shares of the Snapchat parent are up 129% year-to-date.

snap stock daily price chart on june 4


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