Analysts have taken a cautious stance on the marijuana concern for the most part. Coming into today, seven called Cronos a “hold” or worse, compared to four “buy” or better ratings. Meanwhile, the consensus 12-month price target is at a level the equity hasn’t touched since October, and represents a nearly 70% premium to current levels.
This recent activity has the options pits abuzz too. So far, 5,772 put have crossed the tape — nearly double what’s typically seen at this point — compared to 3,324 calls. The most popular, but far is the April 4 put, where positions are being opened.
Typically, it’s bulls who rule the roost, as evidenced by CRON’s 10-day call/put volume ratio of 5.97 at the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX). This ratio sits higher than 96% of all other readings from the past 12 months, implying that long calls have been picked up over long puts at a much quicker-than-usual clip.
This preference for calls could be short sellers hedging their bullish bets, however. While short interest has inched lower in the past two reporting periods, down 1.6%, shorts are still firmly in control. In fact, the 61.96 million shares sold short represent a whopping 35.3% of the stock’s available float, and would take over seven days to cover at CRON’s average daily pace of trading.
