FXCM Share Prices Explode After Heavy Options Purchasing

FXCM's share prices underwent a 33% gain yesterday, after heavy August call's were traded.

FXCM (NYSE:FXCM) has been a tough company to figure out these past few months, namely for the volatility seen in its share prices, which continued during a shortened trading week.

The big jump in FXCM share prices (NYSE:FXCM) came after last week’s news that the company would assume the vast majority of margin foreign exchange (FX) accounts of CitiFX Pro from Citibank N.A. and Citibank International Limited (Citibank) via its US subsidiary Forex Capital Markets LLC (FXCM US) and UK subsidiary Forex Capital Markets Limited (FXCM UK). Markets were closed Monday due to the observance of the Memorial Day holiday.

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When trading opened Tuesday, investors were not disappointed.

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FXCM closed at $1.22 last Friday, May 22, having witnessed a -15.9% loss WoW. The long holiday weekend in the US proved to be a panacea for the beleaguered broker’s shares however, catapulting prices over the $1.75 handle for the first time in a week. Yesterday’s 33.61% gain in FXCM share prices were the largest single-day thrust since bottoming out back in January.

However, the real culprit for the surge in yesterday’s shares of FXCM were due to heavy $1.50 August calls. More specifically, nearly 1,465 August $1.50 calls were traded yesterday, over 1.5 times the open interest of 873. Alternatively, zero August $1.50 puts were traded versus an open interest of 231, according to a recent Benzinga report.

At the time of writing, FXCM shares are trading at $1.66 ahead of the US open.

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