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It's been a roller coaster 2013 for QUALCOMM, Inc. (NASDAQ:QCOM) in the earnings spotlight. After its January report, the stock gapped higher and logged a gain of 3.9% in one day. The April announcement was not so favorably received, as QCOM tumbled 5.4% in the next session. Meanwhile, the company's July earnings triggered a single-day jump of 3.3%. Ahead of the tech company's Wednesday-night release, at least one trader is betting on another post-report bounce from QUALCOMM shares.
Earlier today, the trader initiated a ratio call spread on QCOM by purchasing a block of 1,468 weekly 11/8 71-strike calls, and simultaneously selling 2,936 weekly 11/8 73-strike calls. In other words, the trader sold twice as many calls as he purchased -- thereby substantially reducing the cost of the spread, but simultaneously opening himself up to theoretically unlimited risk, in the event of a steep rally.
One factor working in this trader's favor is the general lack of skepticism toward QUALCOMM, Inc. (NASDAQ:QCOM) ahead of earnings. Short interest accounts for a low 1.3% of the stock's float, and 21 analysts out of 26 already maintain a "strong buy" or "buy" rating. In other words, while a blowout report could still translate into a respectable post-earnings gain, it doesn't appear as though there's a legion of bears who are about to be caught off guard.
In today's trading, QCOM is off 0.8% at $69.35. The company is due to announce its fiscal fourth-quarter results after the market closes this Wednesday, Nov. 6.