Q2 STOCKS TO BUY

Papa John's Put Options Pop After Schnatter Comments

Considering its exposure to China, Nvidia stock is a major loser today

Jul 11, 2018 at 3:34 PM
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Stocks are sharply lower today following a new round of tariff threats from the Trump administration. Three names making notable moves are pizza chain Papa John's International, Inc. (NASDAQ:PZZA), GPU giant Nvidia Corporation (NASDAQ:NVDA), and pharma issue Achieve Life Sciences Inc (NASDAQ:ACHV). Below, we'll take a closer look at what's moving shares of PZZA, NVDA, and ACHV.

Option Bears Circle as PZZA Stock Hits New Low

PZZA stock is down 3.2% at $49.17, and earlier hit a two-year low of $47.80, after reports surfaced that founder and Chairman John Schnatter used a racial slur during a conference call. Schnatter has since apologized.

Papa John's stock has shed more than 12% year-to-date, and today is on the short-sale restricted list. Still, plenty of shorts are likely cheering, as these bearish bets represent more than 21% of PZZA's float. Elsewhere, Papa John's put options are flying off the shelves at 20 times the average intraday clip, with one option bear seemingly initiating a long put spread at the August 42.50 and 47.50 strikes.

Tariff Headwinds Hit Nvidia Shares

The tariff news is having a particularly strong impact on the tech sector, with chip stocks like NVDA moving lower, last seen trading down 2.1% at $247.84. The shares hit an all-time high of $269.20 on June 14, and the subsequent pullback was contained by the 32-week moving average, which also contained the equity's sharp downturn in late April.

Looking at options open interest for contracts expiring within three months, it appears speculators have remained committed to NVDA calls. That's based on the security's Schaeffer's put/call open interest ratio (SOIR) of 0.84, which ranks just 9 percentage points from a 52-week, call-skewed extreme.

ACHV Stock Tries to Find Life

ACHV stock has popped 11% to trade at $4.04, after the company said it's moving forward with its smoking cessation treatment, cytisine. This follows a meeting with the Food and Drug Administration (FDA), and the company is expecting to conduct a mid-stage trial with 250 smokers later this year. Achieve Life Sciences stock has made a number of large single-day moves in the past year, but has failed to hold the momentum, losing 90% year-over-year.

 

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