DocuSign (DOCU) Stock Options Surge: Bearish Bets Rise Ahead of 2025 Earnings Report

DocuSign, Inc. (DOCU) has seen a notable rise in put options within its open interest, signaling growing bearish sentiment among option traders ahead of its fiscal Q2 2024 earnings announcement. Despite the stock price remaining range-bound, the surge in put buying and unusually high option premiums suggest traders are bracing for a potential negative earnings surprise.

Currently, the open interest data reveals more put options than calls, with premiums reflecting heightened volatility expectations. This activity implies that traders anticipate a downward move; however, if DocuSign delivers better-than-expected results, unwinding these bearish positions could trigger a sharp rebound in the stock price.

Analyzing DOCU’s recent price action alongside option trends indicates that a positive earnings report could push shares above the 20-day moving average, breaking the current range-bound pattern. This scenario underscores the potential for swift price swings fueled by market surprises.

Key Insights

• DOCU’s share price has been constrained within a tight range ahead of earnings.
• The stock recently closed above its 20-day moving average, signaling cautious optimism.
• Option premiums and volumes favor puts, indicating a slight bearish bias.
• Volatility-based support and resistance levels suggest room for significant price movement.
• Traders have an opportunity to capitalize on unexpected earnings outcomes.

Chart analysis using 20-day Keltner Channels highlights that DOCU’s price has fluctuated between $282 and $315 in the past month, closing near the midpoint before earnings. The Average True Range (ATR) metric confirms increased volatility, reflecting growing investor confidence as the earnings date nears.

Trading Strategies and Indicators

The ATR, typically calculated over 10 to 20 periods, remains a key tool for assessing price volatility. DOCU’s recent close above the 20-day moving average suggests investors are positioning for a positive earnings surprise, although option activity reveals a cautious stance.

Option volume on September 3, 2024, showed over 3,100 puts traded versus 2,800 calls, indicating a mild bearish sentiment. The Keltner Channel, combining moving averages and ATR multiples, provides a clear visualization of support and resistance zones, helping traders anticipate potential price breakouts or breakdowns.

Market Impact and Outlook

While DOCU is not a market bellwether, its earnings results could influence the broader technology and software sectors. A strong report may boost related stocks like Workday, Inc. (WDAY) and Autodesk, Inc. (ADSK), as well as ETFs including Invesco QQQ Trust (QQQ), Ecofin Digital Payments Infrastructure Fund (TPAY), and ARK Innovation ETF (ARKK).

Given the current volatility range, DOCU shares could experience significant price swings post-earnings, similar to the 19% jump observed after the previous announcement. Investors should monitor option activity and price levels closely to capitalize on potential trading opportunities.

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