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

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

Deputy Editor
Aug 12, 2020 at 3:33 PM
facebook twitter linkedin

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. 

Bernie's Best Stock Bets for Summer 2021



Special Offers from Schaeffer's Trading Partners