Options Run Red-Hot After FireEye's Board of Directors Update

The stock just enjoyed an impressive post-earnings bull gap late last month

Digital Content Manager
Aug 12, 2020 at 3:33 PM
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FireEye Inc (NASDAQ:FEYE) is down 1% at $15.14 after it was announced PepsiCo's (PEP) former Chief Information Security Officer Sara Andrews would join the software company's board of directors. The shares of FEYE are up 16.6% year-over-year, with help from a positive earnings reaction in late-July -- toppling the 180-day moving average for the first time since February -- though the $16 level is now acting as an area of overhead pressure. 

FEYE Aug 12

The news is attracting options players, with 43,000 calls and 3,409 puts across the tape so far -- 1.86 times the intraday average. The most popular by far is the weekly 8/14 15.50-strike call, where it appears positions are being bought to open. Second most popular is the 16-strike call in the same weekly series, where positions are also being opened. 

Prior to today, these bulls ruled the roost. This is per FEYE's 50-day call/put volume ratio of 15.47 at the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX). This ratio stands above 79% of readings from the past 12 months, suggesting a much healthier-than-usual appetite for long calls of late. 

That being said, now looks like an ideal time to speculate on FEYE with options. The security's Schaeffer's Volatility Index (SVI) of 51% sits in the 22nd percentile of its annual range. This implies options players are pricing in relatively low volatility expectations at the moment. 

 

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