3-D printing specialist 3D Systems Corporation (NYSE:DDD) has become a favorite stock for options traders due to its volatile trading history. Interest is again picking up with the company set to report earnings after the close on Wednesday, as DDD open interest currently stands in the 81st annual percentile. And not surprisingly, volatility expectations have been surging.
Specifically, implied volatility (IV) data is calling for a 14.6% one-day post-earnings swing for DDD stock this time around, and such a move wouldn’t be an outlier. Last quarter, the shares jumped 13.1%. However, this followed four straight quarters of post-earnings pullbacks, which includes single-day losses of 23.7%, 21.3%, 3.1%, and 10.3%.
During the past 10 days the March 13 call has seen notable activity, though data hints at sell-to-open activity here, as traders may be trying to use heightened volatility expectations to their advantage. The May 15 call also saw a big increase in open interest.
Outside the options pits, short interest on 3D Systems remains near record levels, accounting for more than one-third of the total float. Going by average daily volumes, it would take more than three weeks for these bears to cover their positions. Analysts share this skeptical outlook, with just one of 12 covering firms recommending DDD as a “buy.”
You can’t blame anyone for being bearish on the stock, since it’s down almost 18% over the past year and the declining 200-day moving average is looming overhead. The shares were last seen trading at $11.96, representing a roughly 50% decline from their 52-week high near $24 from last May.