Q2 STOCKS TO BUY

Option Bulls Target Sizzling Tableau Software Inc (DATA)

For once, Tableau Software Inc (NYSE:DATA) options traders prefer calls over puts

Jul 20, 2016 at 11:48 AM
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Options traders are switching sides today on Tableau Software Inc (NYSE:DATA), as the tech stock rallies on bullish brokerage attention. Specifically, the shares have jumped 6.6% at $57.15, after Citigroup boosted its price target to $54 from $49.

Of late, put options have been very popular among traders. At the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), speculators have bought to open 4.53 DATA puts for every call over the last 10 days -- a ratio that ranks at the top of its annual range. Likewise, the stock's Schaeffer's put/call open interest ratio (SOIR) of 0.66 sits in the put-focused 73rd percentile of its 12-month range.

Today, however, roughly 2,200 calls have changed hands -- four times the usual intraday rate, and just 5 percentage points from a 52-week peak. By contrast, fewer than 700 puts have traded. DATA's most active option is the October 70 call, where traders are buying to open out-of-the-money contracts, expecting the stock will topple $70 by October expiration. Looking back, the shares haven't traded above that level since gapping lower in early February.

On the other hand, today's bullish brokerage attention is par for the course. Of the 22 analysts tracking DATA, 14 have doled out a "buy" or better endorsement, compared to six "holds" and a pair of "strong sell" ratings. Plus, the stock's average 12-month price target of $66 represents a 15.5% premium over the shares' current perch.

Technically speaking, Tableau Software Inc (NYSE:DATA) has been battling back since the aforementioned bear gap. Relative to its early February low at $36.60, the tech stock has rocketed over 56% higher, and is on track for its highest close in roughly five months.

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