Call Traders Blast Teladoc Stock on Amazon Partnership

Call volume is running at eight times the intraday average

Deputy Editor
Feb 28, 2022 at 12:31 PM
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Telehealth stock Teladoc Health Inc (NYSE:TDOC) is moving higher, last seen up 8.7% to trade at $76.88. The equity is capturing the attention of options bulls' today, following news it is teaming up with Amazon.com (AMZN) to bring its services to the latter's Alexa technology. Specifically, Alexa's voice-activated capabilities will allow Teladoc customers to access virtual care services by simply accessing their Amazon Echo, Echo Dot, or Echo Show device. 

Options bulls are rallying around Teladoc Health stock at the midday point. So far, 59,000 calls have crossed the tape, which is eight times the intraday average and more than four times the 13,000 puts that have exchanged hands today. The weekly 3/4 80-strike call is the most popular by far, followed by the 90 call in the same series, with new positions being opened at both.

It looks as if one investor bought 652 contracts on the weekly 3/4 80-strike call for a volume-weighted average price (VWAP) of $2.68. If this is the case, breakeven for the call buyer at the close on Friday, March 4, is $77.32 (strike less premium paid). 

This preference for bullish bets is something of an anomaly for TDOC of late. The equity's 10-day put/call volume ratio of 1.08 at the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), stands higher than 96% of readings from the past year. This implies puts have been more popular than usual over the past two weeks. 

Meanwhile, short sellers piled on the security in the last month, with short interest up 5.3% in the last two reporting periods. The 21.62 million shares sold short now account for a healthy 14.3% of the stock's available float, or nearly one weeks' worth of pent-up buying power.

After falling to its lowest point since August 2019 last Thursday, Teladoc Health stock once again has support from the 30-day moving average, which has pressured the shares lower since November. The $80 seems to have stepped in as a ceiling for the time being.

TDOC Chart 2 Feb 28

 

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