Schaeffer's Top Stock Picks for '25

SNAP Put Options Still Popular After Post-Earnings Plunge

After Snapchat shares got smacked by traders on Thursday, put options are unusually active

May 12, 2017 at 3:31 PM
facebook X logo linkedin


Shares of Snap Inc (NYSE:SNAP) got hit hard on Thursday, falling more than 21% in the aftermath of the Snapchat parent's bleak earnings report. After that blistering sell-off, maybe it's no surprise to learn that put options are unusually active today on SNAP stock -- but traders aren't exactly rushing to buy new bearish bets.

As we head into the final hour of trading, put volume on SNAP has accelerated to triple the norm, per Trade-Alert, with about 78,000 contracts crossing the tape so far. The most active option is the May 18 put, which expires a week from today. However, all indications suggest these puts were sold to open -- meaning the traders expect SNAP shares to remain above $18 through the next five sessions.

At this point, it's worth recalling that the Snapchat IPO price was set at $17 per share -- and equally notable that yesterday's low tick came in at $17.59, with SNAP recovering to finish at $18.05. Just a couple of months out from the stock's public trading debut, it would seem there are still plenty of deep-pocketed players looking to defend that IPO price.

Last month, options traders capitalized on the likelihood of support at SNAP's IPO level by selling to open April 18 puts. That strategy proved successful -- and after the stock's post-earnings trip to the woodshed failed to result in a print below that key psychological level, it looks as though May option premium sellers are once again betting on the big-money SNAP backers to remain on defense for at least another week.

At last check, SNAP shares are up 6.9% to trade at $19.29.
 
 

You have the chance to join one of Bernie's most exclusive programs, complete access at HUGE savings!

As we prepare for a new administration to take the reins in Washington, the near-term market landscape is rife with uncertainty.

The Federal Reserve has already hinted at the turbulence ahead, lowering its interest rate outlook for 2025.

Meanwhile, breakthroughs in artificial intelligence (AI), quantum computing, and other transformative sectors have unlocked incredible profit potential.

But these opportunities are fleeting, and timing is everything. That's where Quick-Hit Trader comes in.

Quick-Hit Trader is designed for precision and speed, getting you in and out of the market in a flash. While other investors scramble to navigate volatile conditions, you'll have access to expertly curated trades that leverage these rapid shifts to deliver explosive profits in short order.

This is your chance to capitalize on the fast-moving market like never before. Are you ready to make your move?