Calls Red Hot on Carlyle Stock After Analyst Upgrade

Calls are running at four times the intraday average

Deputy Editor
Sep 13, 2021 at 1:01 PM
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BMO just came in with a bull note for asset management name Carlyle Group Inc (NASDAQ:CG). The analyst upgraded the stock to "outperform" from "market perform," and lifted its price target to $65 from $59. The upgrade is giving CG a boost, and the equity was last seen up 1.1% to trade at $49.35. 

The stock earlier surged as high as $51.13, almost overtaking its Aug. 2 record peak of $51.55. CG has seen a nearly unstoppable rally in the past 12 months, up 96%, while the 60-day moving average has provided a solid level of support during this time period, capturing several of the stock's sharper pullbacks. 

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Considering this, it's no wonder analysts have been mostly bullish on CG coming into today. There's still room for upgrades, however. Of the 10 in coverage, three still said "hold" or worse. 

An unwinding of short interest could also contribute to CG's rally. Short interest rose 17.1% and now makes up 4.9% of the stock's available float, and would take over a week to cover at its average daily pace of trading. 

The analyst note has sparked a flurry of bullish activity in the options pits. So far, 1,154 calls have crossed the tape, which is four times the intraday average and more than 17 times the number of puts exchanged. The two most popular positions by far are the September 49 and 50 calls. 

Now looks like a perfect time to join these bulls. The security's Schaeffer's Volatility Index (SVI) of 24% stands higher than just 15% of readings from the past 12 months, implying these traders are pricing in relatively low volatility expectations at the moment.

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