Square stock is making an impressive profit
While the shares of Square Inc (NSE: SQ) are down 6.5%, trading at $ 218.22. This is a breather from last week’s post-earnings pop. The security’s decline appears to have hit its 160-day moving average – a trendline that has been held as the floor for over a year. Today’s decline is partly due to the tech sell-off, but analysts are sticking with bull marks. This morning BMO raised its target price from $ 237 to $ 269, bringing the 12-month consensus price target to $ 276.58, a premium of 26.8% over current levels.
This general optimism has also permeated the option pits. SQ landed up again The list of Schaeffer, Senior Quantitative Analyst Rocky White’s stocks that have had the highest weekly option volume in the past two weeks, with the new names highlighted in yellow on the list. White’s table shows 382,006 calls and 196,675 puts exchanged during this period. The most popular contract during this period was the weekly 4/30 strike with 260 strikes, followed by the calls with 250 and 255 strikes in the same series.
Today’s trading remains bullishly skewed despite the retreat. So far, 67,000 calls and 56,000 puts have changed hands. The two most popular positions are the May 195 put and the weekly 5/14 call with 220 strikes, with positions being opened in both positions.
Analysts’ sentiment towards SQ is also bullish after not being loved by brokers for several years. Of the 35 that cover the online payments balance, 21 consider it “Buy” or better, 11 “Hold” and three consider it “Sell” or worse.
Options are an inexpensive way to speculate about SQ’s next move. The security’s Schaeffer Volatility Index (SVI) of 48% is above 11% of the partial year readings, which means that these traders are currently pricing in relatively low volatility expectations. Additionally, Square’s Schaeffer Volatility Scorecard (SVS) is 95 out of 100, which means the stock has largely exceeded those expectations over the past year – a good thing for option buyers.