Q2 STOCKS TO BUY

Overstock Stock, Options Volume Soar on CEO Exit

OSTK call volume surged after Patrick Byrne's announcement

Aug 22, 2019 at 1:52 PM
facebook X logo linkedin


The shares of Overstock.com Inc (NASDAQ:OSTK) have catapulted higher today, after being halted earlier for news. Specifically, the e-commerce and blockchain concern announced that CEO Patrick Byrne is resigning, effective immediately. The exit comes just a week after Byrne said he was involved in a federal probe into Russia and 2016 presidential candidate Hillary Clinton. In a letter to shareholders, Byrne said, "My Rabbi made me see that 'coming forward' meant telling the public (not just the government) the truth." At last check, OSTK stock is up 8.4% at $21.13, and call options are trading at a faster-than-usual clip.

Overstock shares are on pace for a fourth straight day in the black, and have rallied roughly 16% so far this week. After touching a year-to-date high of $26.46 earlier this month, OSTK pulled back, but found support at its 200-day moving average. Today, stock volume is pacing for the 99th percentile of its annual range.

OSTK stock chart aug 22

Prior to the announcement -- at 12:08 ET, to be exact -- Overstock had seen fewer than 3,000 calls and 1,300 puts exchanged. That marked weaker-than-average intraday volume. At last check, however, that volume has ramped up to roughly 19,000 calls -- nearly twice the normal intraday volume -- and 4,700 puts traded. Meanwhile, the equity's 30-day at-the-money implied volatility has jumped to 119.2%, in the 92nd percentile of its annual range.

The weekly 8/23 22-, 23-, and 25-strike calls are the three most popular options today, with new positions being added at all three strikes. Buyers of the calls expect OSTK shares to topple the respective strikes by the close tomorrow, when the options expire.

Over the past two weeks, while absolute call volume has surpassed put volume on Overstock, options buyers have been upping the bearish ante. On the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), the stock's 10-day put/call volume ratio of 0.41 is in the 94th percentile of its annual range. This suggests OSTK traders have preferred long puts over calls by a much wider-than-usual margin over the past couple of weeks. An unwinding of pessimism in the options pits could further propel the security's bounce.

 
 

“Buy This Stock Now!” - Expert Who Called 11x On TSLA

He called a rare 11x on Tesla…

But now, thanks to Elon & Trump’s new alliance…

He says there’s a new opportunity that could be 1,000x BIGGER than Tesla – and it could completely revolutionize a $23 Trillion market.

It’s trading for less than $5 per share right now…

But it won’t be under the radar for long.

Discover The 1,000x Bigger Elon Opportunity Here

GRAND SLAM COUNTDOWN

 
 

Featured Articles from Trusted Partners:

👀Learn How Dividends Create Passive Income for Life
Receive $200 Off Motley Fool Epic. The Motley Fool Epic $299 discounted offer is based on $499/year list price. Introductory promotion for new members only. Take control of your money and your portfolio with Motley Fool Epic.

💵New Income System Could Pay You $4,243 Monthly
You could collect an average of $4,243 per month starting as early as next week with a new payout system for income investors. New registrations are being accepted for investors who want to be in a position to start with their first payout next week.

🚀Easy 92% Crypto Dividends (No Coins Required)
COIN stock doesn't pay a dividend... But there's actually a new way to collect a massive dividend that's indirectly based on the stock and offers a terrific monthly income (currently yielding nearly 92% on a forward basis).

🤝Free Advisor Match with Wiseradvisor.com
Don't leave your retirement to chance! Get matched with a trusted financial expert for FREE and make the most of your tax refund. Get started now.

⚠️Dennis Quaid's #1 Warning for Americans
Here's the thing: life doesn't come with guarantees. The economy shifts, markets stumble, and years of hard work could slip through your fingers like sand. But it doesn't have to be that way for you. So request a free copy of this Gold & Silver Guide that will arrive right to your doorstep when you act now.

 

 
 

Follow us on X, Follow us on Twitter