Option Bulls Charging Toward Fitbit Stock

The equity is down nearly 60% year-to-date

Deputy Editor
Oct 7, 2020 at 3:12 PM
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The shares of Fitbit Inc (NYSE:FIT) are up 1% to trade at $6.91 this afternoon, a few sessions removed from falling short of the $7 mark -- territory the security was stymied by all 2020. This rise also comes after a massive bull gap helped propel the equity above the $6.65 level for the first time since late July. Despite today's positive price action, the equity is still facing a 58.8% year-to-date deficit, but has managed to tack on 32.1% in the last six months.

FIT Chart October 7

Meanwhile, bulls are charging toward Fitbit stock today. So far, 16,000 calls have exchanged hands -- three times the average intraday volume, and over twenty times the number of puts traded. Most popular is the January 2021 8-strike call, followed closely by the November 8 call. This suggests traders are speculating more upside for FIT by the time these contracts expire. 

This penchant for bullish bets is the norm, considering 11,177 calls were traded in the last 10 days, compared to just 629 puts. Those numbers equate to a 10-day call/put volume ratio of 17.77 at the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), which sits in the top percentile of its annual range -- implying a healthier-than-usual appetite for calls of late.

A short squeeze could help FIT higher. Short interest fell 3.7% during the past two reporting periods, and now accounts for roughly 55.71 million shares, or 23.1% of the stock's total available float. At the equity's average daily trading volume, it would take more than 10 sessions to repurchase all of these pessimistic positions.

 

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