Uber Stock Targeted by Option Bulls After Last Week's Earnings

Uber is still set to reach its profitability target

Deputy Editor
Feb 18, 2021 at 2:44 PM
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Last seen down 2.8% at $59.11, ride share name Ride share name Uber Technologies Inc (NYSE:UBER) has been in cool-down mode side last week's fourth-quarter earnings report, which more or less fell within analysts' expectations. While the report did demonstrate the hit companies like Uber have taken during the pandemic, it also showed the company managed to narrow these losses and is still on course to reach its profitability target. While some on Wall Street clearly weren't impressed by these results, seeing as the equity has dropped over 8% from its Feb. 11 post-earnings record peak of $64.05, it hasn't been all doom and gloom for UBER, which has seen an influx of bullish activity in its options pits. 

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In fact, Uber stock just landed on Schaeffer's Senior Quantitative Analyst Rocky White's list of stocks that have attracted the highest weekly options volume within the last two weeks, with new names to the list highlighted in yellow. According to White, 1,028,187 calls and 334,230 puts were exchanged over this two week time period. The most popular position was the weekly 3/19 70-strike call, followed by the March 60 call. This suggests these traders could be speculating on a bounce for UBER by the time these contracts expire next month on Friday, March 19. 

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Calls are continuing to outnumber puts during today's trading. So far, 72,000 calls have exchanged hands -- four times the 18,000 puts traded. The monthly March contracts are still being targeted, specifically the March 65 call where positions are being sold to open. 

This penchant for bullish bets is far from unusual, per UBER's 50-day call/put volume ratio of 2.80 at the Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), which sits in the 92nd percentile in its annual range. Echoing this, the equity's Schaeffer's put/call open interest ratio (SOIR) of 0.76 stands higher than just 16% of readings from the past 12 months. This means short-term option players have rarely been more call-biased as well. 

There's still room to get into on UBER's next move with options, though. The stock's Schaeffer's Volatility Index (SVI) of 54% sits in the 11th percentile of its 12-month range, meaning option traders are pricing in relatively low volatility expectations at the moment. 

  

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