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Himax Technologies, Inc. (ADR) (NASDAQ:HIMX) has jumped nearly 10% on no apparent news, and is now trading around $6.42. As such, options trading is really heating up -- especially on the put side of the fence, where contracts are being exchanged at eight times the usual intraday rate. Short-term options are likewise in demand, per the tech stock's 30-day at-the-money implied volatility (IV), which has spiked 9.3% to 77.5%.
By far HIMX's most active strike is the August 6 put, where 8,603 contracts are on the tape -- more than seven times the volume of the second most active strike. The majority of the out-of-the-money puts traded as a sweep of 4,942 contracts -- at the ask price of $0.30 apiece -- resulting in a total cash outlay of nearly $150,000 (premium paid * number of contracts * 100 shares per contract). IV also shot higher at the sweep, pointing to freshly minted bearish bets.
Digging deeper, this headline trader will profit if HIMX is sitting below $5.70 (strike less premium paid) at the close on Friday, Aug. 15 -- when the front-month contracts expire. Additional gains will be had the lower the underlying is positioned, whereas the most the put buyer stands to lose is the initial premium paid, should the contracts expire out of the money.
From a wider perspective, Himax Technologies, Inc. (ADR) (NASDAQ:HIMX) has struggled greatly in 2014, losing about 56% of its value. In fact, the shares touched the aforementioned breakeven mark of $5.70 as recently as July 18. Looking ahead, the company will report second-quarter earnings before the open next Thursday, Aug. 7.