Options Traders Blast 2 Volatile Car Stocks – Yahoo Finance

long- and short-term options.” data-reactid=”12″>In reaction, Avis Budget shares are up 7.2% today at $27.54, and options volume is booming. Already this morning, around 4,100 calls have traded — 36 times what’s typically seen, and four times the number of puts on the tape. Most active are the January 2020 25-strike and February 28 calls, with Trade-Alert suggesting new positions are being purchased at both the long- and short-term options.

More broadly, speculators are more put-heavy than usual toward CAR options expiring in three months or less, per the stock’s Schaeffer’s put/call open interest ratio (SOIR) of 2.11 — in the 99th annual percentile. The March 25 put is home to peak open interest in the front three-month series of options, and data from the major exchanges confirms notable buy-to-open activity here, meaning traders are bracing for a move below $25 by March options expiration.

Looking at the charts, CAR struggled throughout most of 2018, shedding 57% from its March 20 two-year peak at $50.88 to its Jan. 3 19-month low of $21.63. Since then, Avis Budget has rebounded atop a trendline connecting higher lows. Today’s gap puts the car rental name on pace to close above its 80-day moving average for the first time since early May.

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car stock daily chart feb 11

In the options pits, around 1,800 calls have been exchanged — three times what’s typically seen — while the 1,100 puts on the tape, fewer than expected at this point. The weekly 3/1 19- and 19.50-strike calls are most active, and it looks like one speculator may be using the weekly options to initiate a spread.

Widening the scope reveals an extreme put-skew among short-term traders, per the stock’s SOIR of 2.48, which registers in the elevated 87th percentile of its 12-month range. The April 20 put is the top open interest position in the front three-months’ series of options, and data from Trade-Alert points to some buy-to-open activity here in early January, when GT stock was trading above $21.

Since the start of 2019, the shares have surrendered more than 11%. This is just more of the same for GT, though, which gave back 36.8% in 2018 — its biggest annual loss since 2008. Pressuring the shares lower has been their 120-day and 200-day moving average, and the equity is now comfortably below a short-term floor near $19.

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gt stock daily chart feb 11

 

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