) is trending lower in parity with the
today, off 0.7% to hover at $52.47. Meanwhile, put players have
taken a shine to the online travel concern, as roughly 7,600 of
these contracts have switched hands thus far. This is six times the
equity's expected intraday put volume, and more than eight times
the number of calls exchanged.
The clear front-runner has been the November 50 strike, where north
of 5,600 puts have crossed at a volume-weighted average price
(VWAP) of $2.44. However, the bulk of the contracts traded at the
price, suggesting they were
. Since this put doesn't hold any contracts in open interest, it's
likely that new positions have been added here.
selling the puts to open
, traders are wagering that EXPE will remain perched atop the $50
mark through the close on Nov. 15 -- a time frame that may
encompass the firm's next earnings release, which is tentatively
scheduled for Oct. 30. This would render the options worthless, and
allow the speculators to pocket the initial premium collected. The
delta for this put is docked at negative 0.36, implying it has a
36% chance of finishing in the money. If the puts move into the
money, the sellers could find themselves on the hook to buy the
shares at $50 each, no matter how low the stock should fall between
now and November expiration.
From a technical perspective, Expedia Inc has shed nearly 15%
year-to-date, due largely to an earnings-induced bearish gap on
July 26, which resulted in a single-session loss of 27.4%. However,
the shares have gained a bit of momentum of late, outpacing the
S&P 500 Index
(INDEXSP:.INX) by close to 11 percentage points during the past two
months. Moreover, the $52 level, which is home to EXPE's 10-day
moving average, has recently emerged as a foothold for the
This article by Terri Stridsberg was originally published on
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