Dropbox offers put option hint.
Put traders are enjoying what Dropbox offers. The most active trades were done for two positions: 1) July 18 (28 strike) and 2) May 18 (22 strike). It is too soon to see why some option traders are purchasing these puts. Dropbox ended the week at $30.24.
Dropbox is a file hosting service headquartered in San Francisco, California. Dropbox offers cloud storage, client software, and other services.
(Click on Ad to find out more about service)
Going public on March 23rd, Dropbox shares rose immediately to the tune if 36%. This caused the company to be valued at around $11 billion. But, one must worry about the Dropbox revenue. Their growth rate is slowing at a small pace. Though, they’re growth is faster than the overall market in that space. Wall Street expectations are hard to beat and it will be important to see how the company will show their information.
While Dropbox revenue is important, many investors understand that there will be growing pains. Option traders might be a bit early to the game when buying puts. I would look at Roku, and how they were overvalued at first and then knocked back to earth. I believe Dropbox will go up for a little while. Then, after a meteoric rise, buy those puts at will.
(Article contains Affiliate products from Amazon to better help the investor understand the information written).