Puts Pop on GSX After Short Seller Slams Stock

Options volume is running in the top percentile of its annual range

Digital Content Manager
Apr 14, 2020 at 11:53 AM
facebook X logo linkedin

A bearish note from short seller Citron Research has the shares of Chinese educational specialist GSX Techedu Inc (NYSE:GSX) down 4.3% at $30.06, after hitting a three-month low of $28.29 earlier this morning. Citron said in a tweet that it believes 70% of the firm's revenue is fabricated, and called for the stock to be halted and investigated.

The comments have brought plenty of options traders to the table today, with option volume running in the top percentile of its annual range. So far, 24,000 puts and 1,964 calls have crossed the tape -- nine times the intraday average. Most popular are the April 25 and 30 puts, with positions being opened at both contracts. This suggests these traders are betting on even more downside for GSX by the time these contracts expire this Friday. 

This penchant for puts has been the norm lately. In the past 10 days, 12,655 puts have exchanged hands, compared to just 3,575 calls. Echoing this, GSX sports a Schaeffer's put/call open interest ratio (SOIR) of 2.74, suggesting short-term options players are also favoring puts over calls right now. 

Meanwhile, short sellers have been hitting the exits, down 14.5% in the last two reporting periods. Despite the slide, the 12.35 million shares sold short represent a solid 14.8% of GSX's float, meaning bears are still in control. 

The brokerage bunch is surprisingly optimistic, considering the 27.5% drop GSX has already suffered this month, which could lead to even more bear notes. Of the five in coverage, four analysts say "strong buy" compared to just one "hold." Plus, the consensus 12-month price target of $44.82 is a hefty 49.3% premium to current levels. 


Target Effortless Triple-Digit Gains Every Sunday Evening For Life!

This is your chance to triple your profit potential on Sunday evenings, without spending all your free time watching the market.

On Sundays, as a Weekend Plus subscriber, you’ll get up to 6 trades every Sunday, each targeting gains of 200% or more.

Start targeting gains like the ones our subscribers have seen recently, including:

213.3% GAIN on AutoNation calls
100.0% GAIN on Monster Beverage calls
100.4% GAIN on Walgreens Boots Alliance puts
100.4% GAIN on ON Semiconductor calls
257.7% GAIN on Dell calls

101.0% GAIN on Apollo Global Management calls
103.6% GAIN on JP Morgan  Chase calls
105.3% GAIN on DraftKings calls
101.3% GAIN on Airbnb calls
203.0% GAIN on Shopify calls
102.0% GAIN on Cboe Global Markets calls
100.9% GAIN on Boeing calls
102.1% GAIN on Microsoft puts
102.3% GAIN on First Solar calls
101.5% GAIN on PulteGroup calls
101.0% GAIN on Apple calls
209.4% GAIN on NXP Semiconductors calls
100.8% GAIN on Uber Technologies calls
100.4% GAIN on Academy Sports and Outdoors puts
102.2% GAIN on Trade Desk calls
100.8% GAIN on DoorDash calls
100.0% GAIN on Camping World Holdings puts
100.0% GAIN on Cboe Global Markets calls
100.2% GAIN on C3.ai calls
238.5% GAIN on Oracle calls



Rainmaker Ads CGI