Cloud-based software provider Wix.com LTD (WIX) is up 111% over the past year. One trader sees the trend continuing higher into the second quarter of 2025.
That’s based on the April 17 $260 calls. With 133 days until expiration, 5,365 contracts traded compared to a prior open interest of 117, for a 46-fold rise in volume on the trade. The buyer of the calls paid $8.35 to make the bullish bet.
Wix shares recently traded for about $220, so the stock would need to rise by $40, or 18.2%, for the option to move in-the-money. It would also mean shares break past their 52-week high of $225.54.
While shares have more than doubled this year, operationally, Wix has seen a slower move. Revenues rose by 12%, and earnings are up by 18%. And shares are fairly priced for growth over the next year at 28 times forward earnings.
Action to take: Momentum investors may like shares here, given the strong uptrend in shares. Wix is hardly an extreme growth or an extreme value play, and the reason to buy now would be to chase the price higher.
For traders, the April $260 calls play well for a further rally in Wix shares. Investors can likely see mid-double-digit returns on the options given the current price, strike price, and upside potential.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any company mentioned in this article.