You have likely seen this company’s geeky looking cameras on ski and bike helmets as downhill skiers and mountain bike enthusiasts are able to record their daredevil exploits.
This morning options on GoPro Inc. are listed and available for trading daredevils – only 12 days after the stock first became listed via IPO on June 25, 2014.
The interest in trading this maker of mountable cameras for active sporting pictures and videos has been high as the stock has been a stellar performer in an otherwise quiet holiday market the past two weeks. The stock has risen from its offering price of 24 to over 42.60 today a gain of over 77%!
Because of the interest in trading in GPRO, the options are fairly liquid for the first day. The ATM calls and puts in July are about 20 cents wide bid to ask price. Implied volatility is currently measured roughly about 70%. The risk associated with trading options on a newly listed share is there is no history of the typical movement of the stock, so I would expect that these levels of option premiums could fluctuate widely this week. Pure supply and demand of interested investors in the options will determine the levels with the ultimate level which they settle into being anyone’s guess. I would recommend using limit orders between the bid ask spread in the options
The volume is weighted to the call side of this stock in the first ½ hour of the day as retail traders may be using the options as a less expensive and limited risk way to gain exposure to further upside.The above information is provided by OM Securities, LLC dba OptionsHouse ("OptionsHouse") for informational and educational purposes only and is not intended as trading or investment advice or a recommendation that any particular security, transaction, or investment strategy is suitable for any specific person. You are solely responsible for your investment decisions. Commentary and opinions expressed are those of the author/speaker and not necessarily of OptionsHouse. Neither OptionsHouse nor any of its employees, officers, shareholders or affiliated companies guarantee the accuracy of or endorse the views or opinions of guest speakers or commentators. Projections or other information regarding the likelihood of various investment outcomes are hypothetical in nature and are not guarantees of future results. Any examples used that discuss trading profits or losses may not take into account trading commissions or fees.