ServiceNow Sees $68 Million in Bearish Call Option Block Trades
$ServiceNow(NOW.US$ saw a combined $67.84 million bearish block trades on call options expiring in August at a time when technical indicators are flagging an early warning signal that the stock is overbought.
At exactly 10:54:23 a.m. in New York Friday, four block trades were posted with bearish leanings, according to data compiled by moomoo. Two of the trades were for call options giving the holders the right to buy ServiceNow shares by Aug. 16 at $700. That's below the stock's current price of $743.94. Those two trades had the same size of 2,300 contracts, with a premium of $14.27 million for each of the block.
The other two block trades had a strike price of $620, each covering 1,570 call options also expiring on Aug. 16. The trades carried a premium of $19.65 million each.
The bearish block trades were posted at a time when eight of the 15 technical indicators tracked by moomoo are flashing early warning signals that indicate ServiceNow could be overbought, and the recent uptrend could reverse.
But while technical signals are now bearish, the stock still managed to attract a net inflow of $134.9 million as of 12:05 p.m. in New York, driven by demand from big money. The stock gained 1.2% around midday, outpacing the $Nasdaq Composite Index(.IXIC.US$'s 0.2% rise.
More than 93% of the 30 analysts who track the stock have a buy rating, while 6.67% have a hold recommendation. None of them have a sell rating. The average target price for ServiceNow is more than $860, implying an upside potential of over $100 upside potential for the stock.
Bernstein analysts Peter Weed maintained his buy rating on the stock on May 31, citing ServiceNow's growth prospects. He noted that ServiceNow is well-placed to benefit from companies' reallocation of budgets towards those that capitalize on artificial intelligence and productivity enhancements, according to a TipRanks report.
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Options trading entails significant risk and is not appropriate for all customers. It is important that investors read Characteristics and Risks of Standardized Options before engaging in any options trading strategies. Options transactions are often complex and may involve the potential of losing the entire investment in a relatively short period of time. Certain complex options strategies carry additional risk, including the potential for losses that may exceed the original investment amount. Supporting documentation for any claims, if applicable, will be furnished upon request. Moomoo does not guarantee favorable investment outcomes. The past performance of a security or financial product does not guarantee future results or returns. Customers should consider their investment objectives and risks carefully before investing in options. Because of the importance of tax considerations to all options transactions, the customer considering options should consult their tax advisor as to how taxes affect the outcome of each options strategy. All company analysis information is provided by third parties and not by Moomoo Financial Inc. Any illustrations, scenarios, or specific securities referenced herein are strictly for informational purposes and is not a recommendation. Past investment performance does not guarantee future results. Investing involves risk and the potential to lose principal. This content is also not a research report and is not intended to serve as the basis for any investment decision. The information contained in this article does not purport to be a complete description of the securities, markets, or developments referred to in this material. The information has been obtained from sources considered to be reliable, but we do not guarantee that the foregoing material is accurate or complete. Furthermore, there is no guarantee that any statements, estimates, price targets, opinions or forecasts provided herein will prove to be correct.
Options trading entails significant risk and is not appropriate for all customers. It is important that investors read Characteristics and Risks of Standardized Options before engaging in any options trading strategies. Options transactions are often complex and may involve the potential of losing the entire investment in a relatively short period of time. Certain complex options strategies carry additional risk, including the potential for losses that may exceed the original investment amount. Supporting documentation for any claims, if applicable, will be furnished upon request. Moomoo does not guarantee favorable investment outcomes. The past performance of a security or financial product does not guarantee future results or returns. Customers should consider their investment objectives and risks carefully before investing in options. Because of the importance of tax considerations to all options transactions, the customer considering options should consult their tax advisor as to how taxes affect the outcome of each options strategy. All company analysis information is provided by third parties and not by Moomoo Financial Inc. Any illustrations, scenarios, or specific securities referenced herein are strictly for informational purposes and is not a recommendation. Past investment performance does not guarantee future results. Investing involves risk and the potential to lose principal. This content is also not a research report and is not intended to serve as the basis for any investment decision. The information contained in this article does not purport to be a complete description of the securities, markets, or developments referred to in this material. The information has been obtained from sources considered to be reliable, but we do not guarantee that the foregoing material is accurate or complete. Furthermore, there is no guarantee that any statements, estimates, price targets, opinions or forecasts provided herein will prove to be correct.
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Former editor at Bloomberg, then Lazard Asset Management. Posts aren’t investment advice. Views are just mine.
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