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Coocoo for COCO

COCO is up 10% today on rumors of a buyout coming. Whether or not this is true remains to be seen, but we're starting to see some spec activity in the calls.

Over the past few months the stock has been obliterated due to the government (finally) modifying how for-profit education companies can operate in the space. Today the stock is back above the 20 day moving average, and broke a key level of resistance. This may hold, or there may be a failed breakout coming but given the oversold nature of the stock, we could see a potential gap fill up to 6 and change.

The options volume is suggesting further upside-- over 19k calls traded vs. an average of 3k. On top of that, there was an interesting trade across the tape today. At 11:20, an trader came out and bought 2000 Nov 5 Calls and 2500 Nov 7.5 Calls. Both of these orders were at the ask. So someone is betting that by Thanksgiving we're going to see COCO fill that gap and more-- and they're willing to bet a quarter of a million dollars on the trade. Pretty good size for a gamble.

by Steven Place

Steven Place is the founder and head trader at investingwithoptions.com/