Pinterest Inc (NYSE:PINS) stock jumped to a record high of $36.10 earlier, but has since swung down 0.5% to trade at $33.25. While it's not clear what the catalyst is for this volatile move, the price action has sparked a rush in PINS options pits, with volume running at two times the average intraday pace.
By the numbers, around 16,000 calls and 5,700 puts are on the tape. The August 35 call is most active, and it looks like speculators may be selling to open these options to bet on a short-term ceiling at $35 through front-month expiration at the close this Friday, Aug. 16.
On the flip side, options bulls appear to be purchasing new positions at the August 35.50 call for a volume-weighted average price of $0.84. If this is the case, breakeven for the call buyers at Friday's close is $36.34 (strike plus premium paid).
More broadly speaking, speculators at the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) have bought to open 15,596 calls, compared to 8,607 puts. The in-the-money August 31 call saw a notable rise in open interest over this two-week time frame, and data points to buy-to-open activity here.
It's certainly an attractive time to purchase premium on PINS short-term options, considering they're pricing in relatively low volatility expectations at the moment. This is based on the stock's Schaeffer's Volatility Index (SVI) of 50%, which registers in the 13th percentile of its annual range.