While the stock is down over 5% on Monday, option traders are getting bullish on FUBO TV Inc (NYSE:FUBO) as it approaches a key support level around $16.
What Happened: Fubo has been stuck between the $16 and $18 handles for over three weeks, continually finding bids off the key support level at $16, not having had a weekly close below since Nov. 2020.
Meanwhile, option traders have been buying up calls in spades today by a ratio of 5:1, and have traded over 61,000 options to start the week (image below).
The 61,000+ options traded represents 15% of the total open interest (prior to today's trading). This shows a robust amount of activity from option traders. It should be noted that this is occurring during a holiday week, so option traders are heavily focused on this stock today.
Why It Matters: Any time the options contracts traded on the day is above 10%, it shows a large amount of eyes on the stock between retail and institutional traders. The large amount of calls suggest option traders are bullish and expect the $16 support level to hold.
What's Next: While the short-dated volumes are the largest on the day, with the $17 strike being the highest by volume, the Jan. 21 expiry is showing a large amount of volume and open interest at the $21 strike (image below).
If Fubo can hold the $16 support and get a nice bounce past the $17 strike, this should shift the gamma structure to positive gamma (net long options) which would be supportive of the stock building up to higher prices, potentially up to the $21 strike by the January expiry.
If, however, the stock has a weekly close below the $16 strike, then the stock will try to stabilize at the $15 strike where there is solid open interest.
Related Link: Is FuboTV Stock Overvalued Or Undervalued?
Photo: Courtesy of press.fubo.tv
