Shopify Inc. There are more call options than put options in the open interest, giving the impression that option traders are expecting a bullish move. In the event that SHOP reports a disappointing earnings surprise, the unusual option trading may result in a significant downward trend in price action.
For Shopify, a substantial number of call options are still available, and option premiums are especially high right now. Trading volumes suggest that traders have been hedging against a negative earnings report by selling options and purchasing calls. The unwinding of these bets might provide unanticipated downward pressure on the share price of SHOP.
It might be challenging to accurately forecast which way a stock will move after results. Options are priced assuming an upward movement, thus it is possible that unexpected negative news might catch traders off guard and cause a sharp decline in share price.
The shares of SHOP stock have been dipping below the 20-day moving average during the past month, then rising into the higher portions of the volatility range. It's interesting to note that during the last month, the SHOP share price ranged from close to $1,414 in mid-July to a record-breaking $1,650 just a few days later.
The wide range of support and resistance for pricing is demonstrated by these levels of support and resistance. Because of this, it's probable that any news surprisingly good or badwill take investors by surprise and lead to an out of the ordinary significant move. Following the last earnings report, SHOP shares increased by 11. After this statement, investors might not be anticipating the same type of price movement. The volatility range has lots of flexibility, so share prices might climb or decrease more than anticipated.