Short-term bears targeted
) last Friday, with the stock's weekly April 26 155-strike put
emerging as the day's most active option. A total of 3,284
contracts changed hands here, with roughly two-thirds crossing the
tape at the ask price -- indicating that most of the volume was
buyer-driven. This weekly put gained 3,222 contracts in open
interest over the weekend, confirming the addition of new bearish
bets here on Friday.
The volume-weighted average price (VWAP) on that 155-strike put was
$0.26, which means option buyers need Visa Inc shares to fall below
breakeven at $154.74 (strike price less VWAP) by the end of this
week. That would be a considerable slide for V, as the stock
settled last Friday at $163.96.
These aren't earnings-related bets, either, as Visa isn't scheduled
to report its fiscal second-quarter results until after the market
closes next Wednesday, May 1. Instead, it seems Friday's weekly put
buyers are simply bracing for V to lose more than 5.6% over the
course of this week.
The stock is already on negative ground this morning, with V off
0.5% at $163.13 at 10 a.m. EDT. However, the shares have lately
found a foothold in the $160-$162 area, which previously served as
resistance during most of the first quarter. This region is also
home to the equity's rising 50-day moving average, which hasn't
been breached on a daily closing basis since March 21.
This article by Elizabeth Harrow was originally published on
Schaeffer's Investment Research
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