) -- currently residing at $20.10 -- has tacked on a whopping
114.7% since hitting its 52-week low of $9.57 on December 5,
leading to a heap of bullish betting in its options pits.
Throughout the last 50 sessions, speculators have bought to open
almost five calls for every put, according to the stock's
International Securities Exchange (ISE), Chicago Board Options
), and NASDAQ OMX PHLX (PHLX) 50-day call/put volume ratio of 4.67.
Moreover, this ratio ranks higher than 97% of other such readings
taken within the year, meaning speculators have snatched up calls
over puts at a near-annual-high rate during the time frame.
Still, SNE experienced a change of pace in its options pits
yesterday, as 9,137 puts -- two times the daily norm -- changed
hands, compared to only 5,404 calls. Much of this traffic passed
through at the July 20 put, where 3,601 contracts crossed for a
volume-weighted average price (VWAP) of $0.87. Almost all of the
contracts went off at the ask price, and open interest added 2,443
positions over night, pointing to heavy buy-to-open activity.
Yesterday's put buyers anticipate SNE will fall south of its 40-day
moving average at $19.46, which has acted as nearly constant
support since early December. Even more, these bearish speculators
expect the stock to drop at least 7% to finish below the breakeven
price of $19.13 (strike price less the VWAP) by July 19, when
back-month options expire. If SNE instead lingers above the 20
strike, the most yesterday's put buyers stand to lose is the
initial premium paid per contract.
Stepping out of the options pits, analysts' consensus 12-month
price target for SNE hovers at $25.62, which represents expected
upside of 9.6% from the stock's 52-week high of $23.38. Should Sony
Corporation tumble, as yesterday's call buyers anticipate, a round
of price cuts could be in store, pushing the stock downward. Sony
shares had popped higher in recent sessions, following reports of
an increased investment
from Daniel Loeb's hedge fund.
This article by
was originally published on
Schaeffer's Investment Research
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