AYX was looking ripe for a bullish options trade in late May
Subscribers to Schaeffer's Weekend Trader Series service just doubled their money with the Alteryx Inc (NYSE:AYX) August 85 call option recommendation. Below, we'll explain how this options trade hit its expected target, leaving speculators with a big win.
When we initially recommended the call to subscribers in our May 19 email, the shares of the data analytics firm had outperformed over the long run. The stock had just bounced from double-barreled support at its 40-day moving average and $85 price point, the latter of which represented the stock’s takeoff point for its early May rally, suggesting an ideal an entry point for options bulls.
Additionally, there were large chunks of call open interest at the 90 and 100 strikes that were set to expire in the coming weeks, which could help buoy the shares. Meanwhile, Schaeffer’s gamma-weighted put/call open interest ratio (SOIR) for AYX was docked at 0.55, and previous rises above 0.5 in this reading had preceded stock rallies.
Short interest was also elevated, and represented 12.6% of the float. This left the door open for possible short covering, which could create tailwinds for AYX.
Following our late-May recommendation, the stock rallied thanks to a myriad of bull notes from analysts, which included a fresh "buy" rating and $111 price target from Goldman Sachs. On Monday, the stock hit a then-record high -- AYX nabbed an all-time peak of $107.08 yesterday -- allowing traders lock in a 100% gain in just three weeks.
