After a detailed look at certain options trading volume data for Canopy Growth Corp. (TSX:WEED) (NYSE:CGC) we can see that the sentiment has shifted from bullish to bearish.
How to Use Options Data to Interpret Market Sentiment
Investors can use option trading data to interpret the way that option traders feel about the future trajectory of a given company. The purchase of at-the-money and out-of-the-money call options is considered to be a bullish signal where as the purchase of at-the-money and in-the-money put options is considered to be a bearish signal.
For the most part, we try to ignore more complex option trades from these overviews, as they might be part of a larger trade (or a hedge) that don’t particularly indicate any directional opinion.
Front-Month Option Chain for Canopy Growth Corp.
Possible Catalysts for the Bearish Sentiment
Earlier today, the company announced that it had issued $2,500,000 CAD in common shares of Canopy Growth for a reason that is too vague to decode. The company is also expected to report Q1 earnings for fiscal 2019 before the management team hosts a conference call on August 15th to discuss the results.
Conclusion
As we wait for Canopy’s earnings and conference call to follow, be sure to subscribe to Canopy Growth Updates here and Marijuana Stock Updates here.
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