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Option Trends: Adobe Systems, Carnival, and Juniper Networks

ADBE calls have been active, while puts dominate the action on CCL and JNPR

by 8/16/2012 2:01:42 PM
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Options activity has been heating up lately on software giant Adobe Systems Incorporated (NASDAQ:ADBE - 33.60), cruise operator Carnival Corporation (NYSE:CCL - 33.94), and tech stock Juniper Networks, Inc. (NYSE:JNPR - 18.83), according to volume data from the major options exchanges. Calls are the options of choice on ADBE, while puts are the clear favorite on CCL and JNPR. Here's a closer look at the latest trends in the options pits for these three hot stocks.

First up is ADBE. During the past five days, traders on the International Securities Exchange (ISE) and Chicago Board Options Exchange (CBOE) have bought to open 1,924 calls on the stock, along with just 176 puts. Broadening our scope to include buy-to-open volume from the NASDAQ OMX PHLX (PHLX), as well, ADBE sports a 10-day ISE/CBOE/PHLX call/put volume ratio of 11.00. This reading registers in the 96th percentile of its annual range, as speculators have scooped up calls over puts at a faster clip just 4% of the time during the past year.

ADBE weekly price chartTechnically speaking, ADBE has turned in a solid gain of 16.4% this year, with an early-June pullback supported by the round-number $30 level. After forming a base in this area over the past couple of months, ADBE is now looking to challenge its current 52-week high of $34.78.

Meanwhile, speculative investors have rarely shown a greater appetite for CCL puts. Over the past five sessions, options traders on the ISE and CBOE have bought to open 5,300 puts and 66 calls, netting the shares a lopsided put/call volume ratio of 80.30. In fact, the stock's 10-day ISE/CBOE/PHLX put/call volume ratio now stands at 68.06, in the 99th annual percentile. In other words, pessimism among speculative investors is lingering near annual-high levels.

While CCL has collected a relatively modest gain of 3.2% so far in 2012, this negative sentiment seems a little overdone. During the near term, the predilection for puts could actually be a boon for the shares. CCL is trading north of peak put open interest at the September 32 strike, which means the 6,653 contracts in residence here could provide a layer of options-related support going forward.

Finally, JNPR has also attracted the scrutiny of bearish bettors, as evidenced by its 10-day ISE/CBOE/PHLX put/call volume ratio of 2.93. Not only does this ratio reveal that puts bought to open have nearly tripled calls over the past two weeks, it also ranks above 99% of comparable readings taken over the past year. Echoing this pessimistic theme, JNPR's Schaeffer's put/call open interest ratio (SOIR) is docked at a 52-week high of 1.07.

With the shares down about 15% over the past year, the preference for puts is understandable. However, JNPR has lately been chugging higher, having gained more than 34% from mid-July's 52-week low of $14.01. If the stock can parlay its recent rebound into a breakout above potential resistance in the $20 region, a capitulation by some of the weaker bearish hands could help JNPR's case.

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