Shares of Rackspace Hosting Inc. (RAX) are down 1.70 to 59.25.? RAX recently tanked after earnings.
Today a risk reversal traded in RAX buying the Mar 70 calls for .30 and selling the RAX Mar 50 and Mar 55 puts for .15 and .70.? The volume traded was 2,500, 1,750 and 750, respectively. ??Average volume is 3967 contracts per day in the name.? Open Interest is heavy on all strikes but the Mar 50 is lighter suggesting this is an opening trade.?
The trade looks to be soft long delta looking for little to larger upside movement.
30-day implied volatility is 35%.?? 10-day implied volatility is 112%.? 30-day implied volatility is trading well over the 10-day historical volatility.
Rackspace Hosting, Inc. (Rackspace Hosting) is the service in cloud computing industry.