Short-term options players have been buying puts
Product developer Take-Two Interactive Software, Inc. (NASDAQ:TTWO) is down 5% this afternoon, last seen at $120.50, after the company last night announced the departure of Senior Executive Dan Houser. This comes just ahead of the video game maker's fiscal third-quarter earnings, which are due after the close tomorrow, Feb. 6.
TTWO has struggled to gain positive momentum one the charts long term. Following today's drop, the equity is eyeing its first close below the 160-day moving average since last May. The trendline was recently a key level of support for the shares too, aiding multiple pullbacks between October and January. Year-over-year, Take-Two stock has added 12.3%.
Digging deeper, Take-Two stock sports a 10-day call/put volume ratio of 2.31 at the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX). This lofty ratio suggests that calls have been purchased over puts at a faster-than-usual clip over the past 10 days.
On the flip side, however, is the stock's Schaeffer's open interest ratio (SOIR) of 1.15, which ranks in the 95th percentile of its annual range. In other words, short-term options players have rarely been more put-heavy during the last 12 months.
Looking toward TTWO's earnings history, the stock has closed flat or higher the day after reporting in all but three of the past eight quarters, including an 8% surge last August. Over the past two years, Take-Two stock has averaged a 6.5% swing, regardless of direction. This time around, though, the options market is estimating a higher-than-usual, 11% move for Friday's trading.