Schaeffer's Trading Floor Blog

At-the-Money Calls Active on ON Semiconductor

Options players are scooping up calls over puts on ONNN

by 10/25/2011 3:02 PM
Stocks quoted in this article:

Traders are favoring calls today on ON Semiconductor Corp. (ONNN - 7.11), with bullishly oriented option volume rising to double the usual daily level. So far, 2,074 calls have crossed the tape on ONNN, along with just 146 puts.

ONNN price chartThe day's most active strike is ONNN's November 7 call, where 1,998 contracts have been exchanged. Nearly all of these calls traded closer to the ask price, indicating they were purchased.

From a broader perspective, today's skew toward calls is part of a growing trend for ONNN. During the past 10 sessions, speculators on the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) have bought to open 15.65 calls for every put on ONNN. This ratio arrives in the 69th annual percentile, pointing to a growing preference for bullish bets over bearish.

On the other hand, short interest on ONNN rose by roughly 13% over the most recent reporting period. With short interest and buy-to-open call volume rising in tandem, it's possible that bears are buying calls in order to hedge their bets on the semiconductor stock, rather than to speculate on future gains.

ONNN has emerged as a technical laggard lately, with the stock declining beneath pressure at its 10-week and 20-week moving averages since early June. However, the equity's slide seems to have tapered off near the $6.50 area, which could explain why shorts might be feeling a little anxious.


permanent link
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT

Partner Center

© 2014 Schaeffer's Investment Research, Inc. 5151 Pfeiffer Road, Suite 250, Cincinnati, Ohio 45242 Phone: (800) 448-2080 FAX: (513) 589-3810 Int'l Callers: (513) 589-3800 Email: service@sir-inc.com

All Rights Reserved. Unauthorized reproduction of any SIR publication is strictly prohibited.

Market Data provided by QuoteMedia.com | Data delayed 15-20 minutes unless otherwise indicated.