How Call Traders Scored Big Gains with GoDaddy Stock

We anticipated a large unwinding of pessimism amongst options traders

Deputy Editor
Apr 8, 2024 at 12:07 PM
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Subscribers to our monthly Option Advisor service doubled their investments with our GoDaddy Inc (NYSE:GDDY) May 110 call recommendation, made on Feb. 23. At the time, shares of the web hosting platform were churning higher following a breakout from a multi-year consolidation period over the previous month.

What's more, the stock had just held its December 2023 and January highs that coincided with their 30-day moving average -- a trendline that marked a low to start the year. GoDaddy stock had also found support near the 105-strike put and that week jumped back above the $100, which was home to peak put open interest (OI).

GDDY Chart 2 April 082024

Short-term bearish bets were more popular than usual at the time, too, per GDDY’s Schaeffer’s put/call open interest ratio (SOIR) of 1.08. That optimism did unwind, with the reading falling below 1 in the time since our recommendation. Also at the time, the stock's 50-day put/call volume ratio was at the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) was at 1.53. It now stands at 0.58, another indicator that options traders' pessimism fell.

It's no surprise that calls became popular. Since our recommendation, GoDaddy stock secured a series of higher highs, culminating in today's all-time high of $126.83. This allowed our subscribers to double their investment when they exited their position amid today's record peak.


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