Short-Term Bears Expect a Brutal Week for Visa

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Short-term bears targeted Visa ( V ) 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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Twitter: @schaeffers



The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.



This article appears in: Investing , Options

Referenced Stocks: V , WMB

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