Vistra Stock Could Soon Extend Highs

VST's recent peak came amid historically low implied volatility

Jan 12, 2024 at 8:15 AM

Subscribers to Schaeffer's Weekend Trader options recommendation service received this VST commentary on Sunday night, along with a detailed options trade recommendation -- including complete entry and exit parameters. Learn more about why Weekend Trader is one of our most popular options trading services.

Trending electric stock Vistra Corp (NYSE:VST) just hit an all-time high after consolidating into its 20-day moving average for the past couple of weeks. Plus, its recent peak comes amid historically low implied volatility (IV), as its Schaeffer’s Volatility Index (SVI) of 22% ranks in the low 15th percentile of its annual range, making calls an attractive way to go when betting on the stock’s next leg higher.

VST WT repost

Short interest quadrupled in 2023 through November, though shorts are now beginning to cover. Given VST’s strong 73% year-over-year gain, a string of fresh highs could generate even more short covering in the weeks ahead.

Meanwhile, total put open interest (OI) is in the 67th percentile of the stock’s annual range, while total call OI is lower than 95% of daily readings. Our recommended call option has a leverage ratio 7.7, and will double on a 13% jump in the underlying shares.

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