Subscribers to Schaeffer's Weekend Trader options recommendation service received this FROG commentary on Sunday night, along with a detailed options trade recommendation -- including complete entry and exit parameters. Learn more about why Weekend Trader is one of our most popular options trading services.
Software stock’s JFrog Ltd (NASDAQ:FROG) 27% post-earnings pop on Nov. 7 has acted as support amid its recent pullback. The shares are also now trading at their 100-day moving average, a trendline with quantified results that have recently worked in their favor.
In the options pits, put support can be found between the 55 and 60 strikes, while front-month peak call open interest (OI) at the 60-strike dissipated at the close today. The higher strikes could become magnets, especially if there is a break above $62.50, where there’s a runway toward a buildup of 75-strike calls.
Short interest has more than doubled over the past month and is sitting near one-year range highs, where we’ve seen buys work out over the subsequent months.
Options are affordable, per the stock’s Schaeffer’s Volatility Index (SVI) reading of 66%, which ranks in the 29th annual percentile. Plus, this is a name you’d rather own with rising implied volatilities (IV) than a low IV, as that often has indicated chop of a bull trap.
Our recommended March call has a leverage ratio of 5.3 and will double on a 22.3% rise in the underlying equity.
Join thousands of traders who make more informed decisions with our premium features.
Real-time quotes, advanced visualizations, backtesting, and much more.