The security looks ripe for a short squeeze
Rocket Lab USA Inc (NASDAQ:RKLB) was last seen up 5.9% to trade at $19.50, after the U.S. Space Force awarded the aerospace & defense name a national security contract, meaning the company will receive $5 million to expand its launch system portfolio for critical space capability, and can now compete for future U.S. national security launch missions.
RKLB sports an impressive 374.5% year-over-year lead. The $15 level contained a pullback from a Jan. 27 record high of $33.34, with additional support stemming from its 160-day moving average. The equity is today testing a ceiling at the $21 level, which has been in place since late February.
Over at the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), Rocket Lab USA stock's 50-day put/call volume ratio sits in the 96th percentile of annual readings. This suggests options traders have been much more bearish than usual.
That pessimism is beginning to unwind today, with 12,000 calls and 4,593 puts traded so far, which is triple the overall options volume typically seen at this point. Most popular is the weekly and expiring 3/28 20-strike call, where positions are being opened.
The security looks ripe for a short squeeze, too. Short interest rose 9.1% in the last two reporting periods, and the 56.53 million share sold short now make up 12.6% of RKLB's available float.