A Year Of Living Dangerously: The DryShips Trade

There’s not much to say from an investing standpoint about a stock that has declined 99.6 percent in the past year. However, for day traders, the past year has been one of the most historic and memorable years in history for DryShips Inc. DRYS and its stock.

DryShips reported Q4 earnings after the market close on Tuesday, and there’s absolutely no telling where the stock will head on Wednesday.

There have been four DryShips reverse stock splits in the past year. All together, each share of DryShips stock today represented 1,200 shares a year ago. The stock has been restructured so many times that it’s hard to know which short interest numbers are even reliable. Yahoo Finance recently had DryShips’ short percent of float above 160 percent.

On a reverse split-adjusted basis, DryShips’ 52-week high is $2,227. Today, the stock stands at around $5.30.

And yet plenty of traders likely made more money off of buying DryShips stock in the past year than they ever thought possible.

DryShips provided several previews of would come in early and mid-2016. In July, the stock jumped 62.9 percent in four trading days. In August, DryShips made another nearly 40-percent run in six trading days.

Of course the move that day traders will be studying for years is the incredible move from a split-adjusted $30.72 in early November to as high as $810.00 within a couple of weeks for a mind-blowing 2,500 percent gain. Any short sellers that were able to borrow shares may have made a similar killing when the stock plummeted back to $1.97 following the latest reverse split.

But even 2017 has provided a buying opportunity. DryShips traders that timed the stock’s bounce from $1.97 to as high as $6.38 had the opportunity for 220 percent gains in recent weeks.

How DryShips will respond to Q4 earnings is anyone’s guess. However, it’s likely that the stock could deliver some explosive volatility one way or the other.

In The pre-market session, the stock was down about 9 percent at $4.41.