Unusual Options Activity: WW International (WW)

Shares of weight management company WW International (WW) have more than doubled since the start of the year. One trader sees a further rally ahead for the stock in the coming weeks.

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  • That’s based on the August $10 calls. With 37 days until expiration, 5,398 contracts traded compared a to a prior open interest of 249, for a 22-fold rise in volume on the trade. The buyer of the calls paid $0.65 to make the bullish bet.

    WW shares recently traded for about $8.50, so they would need to rise $1.50, or about 18 percent, for the options to move in-the-money. The stock has a 52-week high of $10.02, so such a move is possible.

    The company has struggled in the past year, with a 20 percent drop in revenue, and no positive earnings over the past three quarters.

    Action to take: Despite the company’s struggling business, shares are in an uptrend as the company could be on track to narrow its losses. Investors may want to avoid shares as an investment, but as a speculation, they certainly have momentum right now.

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  • For traders, the August $10 calls are aggressive, but are inexpensive enough to deliver mid-double-digit returns in the coming weeks on a further move higher. Traders should take quick profits here, given the short time left on the option.


    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.