Square SQ stock news and analysis

Several reasons Square stocks might be poised for a rebound

Online business support name Square Inc (NYSE: SQ) appears to bounce off the 200-day moving average. The stock is highly correlated to Bitcoin (BTC) and has a lot of headroom as analysts are currently pessimistic about the cryptocurrency.

16th June

There is also space in the option boxes for increased optimism. Schaeffer’s security’s 1.21 put / call open interest ratio (SOIR) is in the 83rd percentile of its annual range, meaning that short-term option traders were more likely to put than normal. The big weekly 220 call has also just expired and has removed a layer of potential resistance. Additionally, SQ’s gamma-weighted SOIR for the front month is a top-heavy 1.13, which means the proximity of the money outweighs the calls among options that expire in the standard July streak.

Plus, Square stock could benefit from a short squeeze as shorts may seem to be covering up recently given SQ’s technical strength. Short positions have accumulated at much lower price levels, and short rates account for 8.1% of the stock’s available float, or more than three days of pent-up purchasing power.

After all, now seems like a good time to weigh SQ’s next step with options. The stock is currently seeing attractively valued premiums, according to Square Stock’s Schaeffer’s Volatility Index (SVI) of 42%, which is only in the 3rd percentile of its annual range. Last year, too, the share tended to exceed these volatility expectations, as shown by the Schaeffer’s Volatility Scorecard (SVS), which stands at 98 out of 100. Our recommended call has a leverage ratio of 5.5 and will double in value if the underlying rises by 18.4%.

Subscribers to the Weekend Trader option recommendation service from Schaeffer received this SQ comment on Sunday evening together with a detailed option trading recommendation – including the complete entry and exit parameters. Find out more about why Weekend Trader is one of our most popular options trading services.

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