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Snap Put Options Unusually Cheap Ahead of Earnings

Snap will report earnings next Tuesday, May 1

Apr 25, 2018 at 3:25 PM
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It's been a roller-coaster ride for the broader U.S. stock market, as Wall Street weighs a fresh batch of corporate earnings and the 10-year Treasury yield holds near a four-year high. Among individual stocks, Snapchat parent Snap Inc (NYSE:SNAP), healthcare management name Magellan Health Inc (NASDAQ:MGLN), and drugmaker Dare Bioscience Inc (NASDAQ:DARE) are all seeing volatile trading. Here's a closer look at what's moving shares of SNAP, MGLN, and DARE.

Snap Stock Sinks on Snapchat Redesign Redesign

Snap stock is trading down 7.5% at $14.46, after the company said it is testing a redesign to its Snapchat redesign. Today's drop has SNAP stock on track to break its four-day win streak -- the longest since late January -- and trading back below its year-to-date breakeven mark.

Longer term, the shares have been trending lower since their mid-March highs north of $18.40, pressured by their descending 30-day moving average. Nevertheless, short-term puts are pricing in unusually low volatility expectations relative to their call counterparts ahead of the company's upcoming earnings report, scheduled for release after next Tuesday's close. SNAP's 30-day implied volatility skew of negative 2.8% ranks in the 4th annual percentile.

Magellan Health Stock Drops Ahead of Earnings

The state of Florida said it has awarded its Medicaid vendors contracts to WellCare (WCG) over Magellan Health, sending shares of the latter down 16.7% to trade at $92.50. MGLT stock is now on track for its worst day ever, after hitting a record high of $112.25 last Thursday.

MGLN shares could see even more volatility in tomorrow's trading, with the company slated to report first-quarter earnings ahead of the open. The stock has closed lower in the session after earnings in five of the past eight quarters, but jumped 17.8% following its November 2016 results. This time around, the options market is pricing in a 11.8% next-day swing in either direction.

Dare Bioscience is the Best Stock on the Nasdaq Today

Dare Bioscience said it's inked a deal with Juniper Pharmaceuticals (JNP) to license the former's intravaginal ring technology. The news has sent DARE stock up 67.2% to trade at $1.36 -- the best percentage gainer on the Nasdaq so far today. More broadly, the penny stock has been selling off since its July annual high of $12.40, down 89%, and is not far removed from its April 3 record low of $0.74.

 
 

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