GoPro Inc (GPRO) Stocks Displayed Unusual Behavior on First Day of Option Trading


GoPro Inc (NASDAQ:GPRO) made a scintillating debut in share market in June 26, 2014 with IPO price of $24 per share. In less than four days of trading the share value doubled. The camera maker’s options became valid for trading on Monday.

GoPro Inc (NASDAQ:GPRO), Facbook Inc (NASDAQ:FB), Twitter Inc (NYSE:TWTR), unusual options trading

‘Fast Money’ trader, Pete Najarian, talked on CNBC about the activity around the GoPro options trading on its first day and compares it against Twitter Inc (NYSE:TWTR) options trading back in November 2013. He feels that many people compared the GoPro Inc (NASDAQ:GPRO) stocks against the big names like Facbook Inc (NASDAQ:FB) and Twitter Inc (NYSE:TWTR) and anticipation of option trading was high. But the main differentiating factor is that the volatility of options for GoPro started at more than 80% when compared to other company volatility of less than 60%.

From the volume perspective, Twitter Inc (NYSE:TWTR) on first day traded 240,000 contracts, whereas GoPro midway through the first day traded just 12,000 contracts. This is a huge difference, in spite of the fact that both the company stocks traded in a similar manner before options trading. This kind of similarity was actually expected in options trading as well, but the outcome on first day is pretty unusual. Najarin thinks that there were some very good options provided by GoPro Inc (NASDAQ:GPRO) like zero cost covers which can protect the investor during down trend and limits during the up-trend.

He accepted that he was surprised to see the unusual activity around the GoPro Inc (NASDAQ:GPRO) options. He feels that it was a very valuable week before the option trading, which had lot of ups and downs in the GoPro share values.

“I think this is the kind of stock, because of how many shares were actually released on the IPO, I think this is going to remain a very valuable stock. It’s going to get pushed around a lot, once people are able to start shorting it so forth, I think we are going to really see the way the stock could trade”, Najarian stated.

Disclosure: None