Navigating the Open Interest of Options on 7/7: Analyst Upgrade Fuels More Optimism for RIVN

Options Newsman wrote a column · Jul 8, 2023 06:29

$Rivian Automotive (RIVN.US)$, the electric vehicle maker, saw its shares soar 14% today, marking its eighth consecutive day of gains. The rally was fueled by a bullish report from Wedbush, which raised its price target for the stock by 20%. Investors also showed more confidence in Rivian’s prospects, as evidenced by the rising open interest for its call options with a strike price of $40.00 and an expiration date of 9/15/23. This was one of the most notable increases in open interest today.

$Verizon (VZ.US)$, the telecommunications giant, faced a decline in investor interest today, as shown by the drop in open interest for its call options. Today's most significant decrease was observed for the call option with a $36.00 strike price and a 7/21/23 expiration date. This suggests investors are less optimistic about Verizon's future performance and growth potential.

Navigating the Open Interest of Options on 7/7: Analyst Upgrade Fuels More Optimism for RIVN

$Camden Property Trust (CPT.US)$ witnessed a sharp rise in its open interest put-call ratio today, which jumped by 108.3% to 2.57. This was the largest increase among S&P 500 stocks.

Among the S&P 500 companies, $BorgWarner (BWA.US)$ had the biggest decline in its OI PCR by 85.3% to 0.0.15 today. This shows that the mood around the stock has improved from yesterday.

What is Open Interest Put Call Ratio? An indicator to help with market sentiment analysis within specific time-frames.

OI PCR can be used to determine market sentiment -- if it is greater than 1, it is considered bullish, and if it is lower than 1, it is considered bearish. And computed by total open interest of all the puts divided by total open interest of all the calls.

Its utility, however, goes beyond this simple interpretation. The OI PCR can be used to determine market sentiment. If the OI PCR is greater than 1, it is considered bullish, and if it is lower than 1, it is considered bearish. However, its utility goes beyond this simple interpretation. The indicator can detect the dangerous consensus we discussed earlier, which can lead to drastic price movements.

To provide context, when the OI PCR goes significantly above 1, it indicates a shift from a bullish sentiment to an extremely bullish sentiment. Similarly, if the OI PCR is close to 0, it suggests an extremely bearish mood.

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