Unusual Options Activity: Expedia Group (EXPE)

Shares of online travel agency Expedia Group (EXPE) have been trading in a range over the past year as the pandemic has continued. One trader sees the chance for a move higher in shares in the months ahead.

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  • That’s based on the June $190 calls. With 150 days until expiration, 5,293 contracts traded compared to a prior open interest of 146, for a 36-fold rise in volume. The buyer of the calls paid $19.17 to make the trade.

    Shares last traded around $185, so the stock would need to rise just under 3 percent for the option to move in-the-money.

    While shares have largely been rangebound in the past year, the stock may move higher now that it’s finally starting to report quarterly profits again. Shares last traded at 15 times earnings as well, so an ongoing improvement in travel trends could boost returns and thus the stock price even further.

    Action to take: The company has a healthy balance sheet and revenue is rising rapidly, making for a decent growth play at a reasonable valuation here. Shares should likely head higher, making for an attractive investment now, although the stock doesn’t currently pay a dividend.

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  • For traders, the June calls are near-the-money and have plenty of time to pay out. So while expensive, they could make traders mid-to-high double-digit returns well before expiration.

     

    Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.

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