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Option Clips: Skullcandy Inc, Pixelworks, Inc., and Nike Inc

Reviewing notable options activity on Skullcandy Inc, Pixelworks, Inc., and Nike Inc

by 3/7/2014 1:27 PM
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Two equities generating buzz on StockTwits today are headphones maker Skullcandy Inc (NASDAQ:SKUL) and video software concern Pixelworks, Inc. (NASDAQ:PXLW). Meanwhile, athletic apparel king Nike Inc (NYSE:NKE) is also garnering notable attention in the options pits. Here's a look at how traders have been aligning their speculative bets today.

  • Skullcandy Inc (NASDAQ:SKUL) has skyrocketed 34.1% to $9.96, after touching a year-plus high of $11.40 in early trading. Investors are applauding the company's fourth-quarter earnings beat and rosy outlook, sending more than 5,000 calls across the tape -- 58 times the stock's average intraday call volume, and more than double the number of puts exchanged. Upon closer inspection, option bulls have taken a shine to the June 12 call, which is most active on the day. By purchasing the calls to open, the buyers expect SKUL to extend its quest for new highs and topple $12 within the next three months.

  • Pixelworks, Inc. (NASDAQ:PXLW) nearly doubled to touch a seven-year high of $9.05 yesterday, thanks to news of a blooming partnership with Apple Inc. (NASDAQ:AAPL). Today, however, the shares have come back down to Earth, surrendering 20.2% to trade at $7.18. Considering PXLW is on the short-sale restricted list, bears are turning to the options pits to gamble on a steeper pullback. In fact, intraday put volume is running at 29 times the norm, with speculators buying to open the April 5 put. Of course, considering the puts are still out of the money, this buying activity could be attributable to PXLW shareholders looking to lock in profits after yesterday's surge. By buying protective puts, the speculators secure an acceptable price at which to sell their shares ($5 apiece), should the security erase nearly all of its recent gains and breach the strike within the next six weeks.

  • Finally, Nike Inc (NYSE:NKE) is enjoying a halo lift from sector peer Foot Locker, Inc. (NYSE:FL), which just unveiled stronger-than-expected quarterly earnings. NKE was last seen 1.6% higher at $79.45, and options traders are rushing to place bets ahead of the company's own turn in the earnings confessional on Thursday, March 20. The stock's 30-day at-the-money implied volatility is 5% higher at 26.3%, echoing the escalating demand for short-term contracts. Digging deeper, calls are the options of choice, with roughly 37,000 contracts exchanged -- nine times the average rate, and more than 10 times the number of NKE puts traded. Garnering notable attention is the near-the-money March 80 call, where a block of nearly 2,500 contracts was bought to open earlier today.


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