Potential Upside For Avid Technology (NASDAQ: AVID)

Traders exchanged 1,361,622 shares of Avid Technology (NASDAQ: AVID), over 3.18 times the 30-day average daily trading volume. Shares were also up significantly, on March 17, 2017, the stock was up 11.46% at the close. The stock experienced a high degree of volatility over the past 52 weeks, trading between $3.99 and $9.78 over the past trailing 52 weeks, as of March 17, 2017.

That in mind, AVID has been down over the past trading week, underperforming the industry by 3.20%. The entire electronic gaming & multimedia industry has been has been up 5.22% over the last month, but unfortunately the stock has been down -15.50%.

This week, Avid Technology announced its postponement of its conference call scheduled on March 15, 2016 at 5:00 PM ET. The company postponed its conference call and issuing fourth quarter 2016 financial results and issuing first quarter and full year 2017 guidance.

AVID Options Activity

We saw a flurry of option activity in Avid Technology Inc, as option volume was 53 times the usual volume. With that said, the first large order we saw was approximately 20 minutes after the open. An option player came in and bought 1,000 April 5 calls on the ask side for $0.30. This was when the stock was trading around $4.57 per share.

In other words, the trader needs to see the stock close above $5.30 on the expiration date, in order to break even on the trade… that’s a whopping 15.9% move higher from where they got in. Now, when this trade went off, there was an open interest of 2,233 contracts on that strike price. We didn’t know if the option player was closing a short position or adding to an existing long.

However, as the day progressed more call buying ensued. For example, one order that stood out, was about an hour after the open. An option player went in and swept 1,960 April 5 calls for $0.30, this time the stock was trading around $4.72 per share.

When the dust settled, there were over 5,000 contracts that traded on that strike. With that said, volume was greater than open interest… meaning that new positions were established. We’ll have to see the open interest on Monday, and examine how much it changes. Clearly from today’s option activity, someone thinks the stock will be trading higher.

AVID Options
Source: Yahoo Finance

Therefore, this bet could be indicating the market might be bullish in Avid Technology’s conference call and issuing of first quarter and full year 2017 guidance. However, we still don’t know when the company will release this data.

AVID Key Statistics

Take a look at some statistics on Avid Technology that you might find helpful:

– Avid Technology had a market cap of $167,603,500, as of March 10, 2017.
– AVID had 33,791,028 shares outstanding and a short interest of 3,872,425 shares, or 11.46% shares short.
– Avid Technology had a trailing 12-month EPS of $0.97, and it had revenue of 535,441,000.
– The company reported total liabilities of $535,651,000 and total equity of -$272,733,000 in its recent financial statements. Since the company had negative equity recently, you might want to look more into the company’s financials.

The Bottom Line

There was heavy options activity in AVID today, and it could be an indication that some market participants are bullish on the name and may be looking for a rebound. However, AVID postponed its conference call, earnings results and guidance, and we’ll have to wait to see what day it’ll release its financial results.


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