SNOW Makes Big Splash Among Option Traders After IPO

Options bulls have had high hopes for SNOW, while analysts have taken a more cautious approach

Deputy Editor
Dec 17, 2020 at 2:06 PM
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Below is a list of 20 stocks that have attracted the highest weekly options volume in the last 10 trading days, courtesy of Schaeffer's Senior Quantitative Analyst Rocky White, with highlighted names new to the list. This time, the one name new to the list is cloud provider Snowflake Inc (NYSE:SNOW), which went public back in mid-September. 

When we last checked in on the Wall Street freshman, the company had just posted its first earnings report as a publically traded entity, and already its options pits were on fire. That was in early December, and it looks like since then, traders haven't slowed down. According to White's data, 322,422 calls and 182,668 puts were exchanged in the past 10 days. The most popular contract during this time period was the 12/11 400-strike call. The 12/4 400-strike call was also quite popular during this time frame. 

MAO Dec 17

This suggests traders expected the underlying stock to rise above the $400 level by the time these respective contracts expired. This did come to fruition, with SNOW scoring several intraday highs above the $400 mark, including a Dec. 8 record spike to $429. Since then, however, the security has been retreating. There is some good news for bulls, though, by way of the 20-day moving average, which has acted as a source of support during the stock's latest pullback. At last check, SNOW is trading sideways at $329.84.

SNOW Dec 17

A look at today's trading shows calls still outnumbering puts. So far, 18,000 calls and 11,000 puts have crossed the tape. The two most popular contracts are the monthly  December 340 call, as well as the 350 call in the same series, with positions being opened at the former. 

Analysts are still cautious, too. Thirteen call it a "hold" or worse, compared to seven  "strong buy" ratings. Plus the 12-month consensus price target of $298.55 is a 9.2% discount to current levels. 

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