The shares are flirting with record highs, yet options remain attractive
Beverage concern SodaStream International Ltd (NASDAQ:SODA) appeared on Schaeffer's Senior Quantitative Analyst Rocky White's list of stocks that are currently trading near a 52-week high, but also sport a low Schaeffer's Volatility Index (SVI). This combination of stellar price action and relatively inexpensive short-term options has been a bullish signal for SODA stock in the past.
Looking closer, SODA has been in a long-term uptrend four roughly two years, with recent pullbacks contained by its 50-day moving average. The stock touched a record high of $96.32 on March 21, and was last seen trading 0.2% lower at $93.98.
Furthermore, SodaStream stock currently sports an SVI of nearly 32%, ranking in the 9th percentile of its annual range. This low reading suggests that near-term options are pricing in relatively low volatility expectations at the moment, leaving plenty of room for a more optimistic volatility outlook from traders in the near future.
Since 2008, there have been just three other times SODA stock was flirting with a new high and had an SVI in the bottom 20% of its annual range. After those instances, the shares went on to gain 5.18%, on average, over the next month. A similar pop from current levels would place the equity around $98.95 -- back in uncharted territory.
Despite this positive price action, analysts aren't quite convinced, with half of the brokerages following the stock carrying tepid "hold" recommendations. This leaves plenty of room for more bullish analyst attention going forward.
An unwinding of pessimism among options players could also translate into a boon for SODA, which sports a 50-day put/call volume ratio of 1.13 at the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX). This reading ranks in the high 80th annual percentile, meaning put buying has been unusually popular in recent weeks, relative to call buying.
Echoing this, SodaStream stock's Schaeffer's put/call open interest ratio (SOIR) of 2.82 ranks in the high 89th percentile of its annual range. In other words, the beverage stock holds a heavier-than-normal put-skew among open options expiring within three months.