New bull market in software stocks hinges on this report
Options traders believe the “SaaS apocalypse” is over. Whether this is true will likely depend on the market reaction. sales force Winnings after the bell Wednesday.
Volume rates in options trading iShares Extended Technology-Software Sector ETF (IGV) Over the course of this month, it has become increasingly bullish, including on Tuesday, when more than twice as many trades occurred as sales, with a heavy bias towards buying and selling. In comparison, five times as many puts are traded in the market VanEck Semiconductor ETF (SMH) than searches.
Cloud giant Salesforce, which is down more than 50% from its all-time highs 18 months ago, will have a huge impact on the group, which is now up more than 25% since its April low; This is the technical definition of a new bull market.
Salesforce, 1 year
More options contracts traded on Salesforce alone on Tuesday than on IGV, and with 61% of the premium on Salesforce traded around call contracts, according to SpotGamma data, the total premium traded was almost three times higher. More than 10,600 calls were purchased compared to just over 4,100 puts.
Options traders are expecting an abnormally large move for the stock. Implied volatility is priced at a 7.8% swing, more than double the move after the last four earnings reports, according to Cboe LiveVol data.
Most of the largest trades by dollar amount occurred at the June 18 expiration, but at least one trader at Salesforce has high short-term hopes: They spent $650,000 to buy 2,000 of the 195 strike calls expiring on Friday, looking for a move of almost exactly 10% heading into the weekend.
