Equifax has already plunged 18% since it announced last week that hackers may have the personal details of nearly half the US population.
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Equifax is getting crushed — and traders are betting it's going to get so much worse (EFX)
Options traders are betting that Equifax's stock has even further to fall in the wake of the massive security breach announced last week.
Options traders are betting that this is only the start.
As of Monday, the options contracts with the largest outstanding bets on the stock profit from a decline of 15% to 19% over the next five weeks, according to data compiled by Bloomberg.
More specifically, the two contracts represent wagers that Equifax's stock price — which closed at $123.23 on Friday — will fall to either $105 or $100, respectively, by October 20.
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Outsized trading in Equifax put options is also manifesting itself in myriad other ways:
- exchange-traded fund tracking the benchmark S&P 500
No matter how you slice it, that's an overwhelming amount of negative activity around Equifax's stock on a forward-looking basis.
"There's a ton of put trading in this thing, and they're all buyers," Mark Sebastian, a trader who founded Option Pit, a Chicago-based education and consulting firm, told Business Insider by phone. "Lots and lots of people think this stock is going to drop."
To best understand the issues facing Equifax, let's break down the news of the past few days, relating not only to the breach but also to the company's bungled response:
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- announcement of the breach
- sold almost $2 million worth of the company's shares
- ended up infuriating people
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