QCOM – Qualcomm, Inc. – Weekly put options purchased on Qualcomm yesterday are generating substantial overnight gains for some traders today, with shares in the name trading down more than 3.5% this afternoon.
Buyers of the Sep 13 ’13 $70 strike puts on Tuesday saw the value of those contracts more than triple overnight with the move in the price of the underlying. Time and sales data indicates traders picked up roughly 3,000 of the $70 puts yesterday for an average premium of $0.66 per contract. Today, the $70 puts are changing hands at a bid price of $2.33 each as of the time of this writing. Earlier in the session, roughly 1,300 of the $70 strike puts were sold at an average premium of $1.92, perhaps as some strategists take profits.
Meanwhile, bears positioning for shares in QCOM to extend declines this week snapped up roughly 2,200 of the Sep 13 ’13 $67.5 strike puts for an average premium of $0.33 each. Traders long the $67.5 puts may profit at expiration this week should shares in Qualcomm decline another 0.80% from the current price of $67.70 to breach the average breakeven point on the downside at $67.17.
FIO – Fusion-IO Inc. – Shares in Fusion-IO rallied 18% during early-afternoon trading on Wednesday to touch $15.50, the highest level since August 7th, on continued takeover chatter. Traders speculating shares in the name will extend gains in the near term appear to be picking up call options on the stock today.
The most traded options by volume on FIO thus far in the session are the Oct $16 calls, with upwards of 13,000 lots in play versus open interest of 1,343 contracts. Time and sales data suggests much of the volume in the $16 calls was purchased at premiums of $0.45 and $0.50 within the first hour of the opening bell. Intraday gains in the price of the underlying now find the Oct $16 calls changing hands at an asking price of $1.25 apiece. Traders long the calls at $0.45 per contract stand ready to profit at expiration next month in the event that FIO shares exceed the breakeven price of $16.45. The stock last traded above $16.45 in May.
Overall options volume on Fusion is approaching 42,000 contracts as of the time of this writing, more than four times the stock’s average daily volume of approximately 9,150 contracts. Trading is heavily concentrated in calls, with the call/put ratio hovering near 7.6 as of 12:25 p.m. ET.
ORAN – Orange – The provider of Internet, television, mobile and digital services, formerly known as France Telecom, popped up on our ‘hot by options volume’ market scanner on Wednesday with heavier than usual trading traffic in out of the money calls. Shares in Orange are up 1.5% at $11.47 as of midday in New York.
The most active options on ORAN are the Feb ’14 $12.5 strike calls, with more than 700 lots traded against open interest of 193 contracts. Time and sales data indicates most of the calls were purchased at a premium of $0.25 each within seconds of the opening bell this morning. The call options may be profitable at expiration next year in the event that ORAN shares rally more than 11% over the current price to exceed the breakeven point at $12.75. The Nov $12.5 strike call options are also changing hands, with more than 220 contracts purchased in the early going for a premium of $0.15 apiece.
