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Put Players Flock Toward OmniVision Technologies

OVTI's put volume rises, despite technical prowess

by 3/26/2012 10:52 AM
Stocks quoted in this article:

Put players zeroed in on OmniVision Technologies, Inc. (OVTI - 19.26) on Friday, as more than 9,600 of these options changed hands, which was almost double the equity's average daily volume. Most active proved to be the out-of-the-money June 15 strike, where roughly 2,500 puts were traded -- a large chunk of them at the ask price, pointing to buyer-driven volume. However, open interest at this strike declined by 576 contracts over the weekend, signaling liquidation activity. This option now holds open interest of 5,309 contracts.

This preference for puts over calls is more of the same for OVTI. The Schaeffer's put/call open interest ratio (SOIR) checks in at 1.67, indicating that puts comfortably outnumber calls among options scheduled to expire in three months. This ratio is just three percentage points shy of an annual high, conveying that near-term options players have rarely been more pessimistically aligned toward the stock within the last 12 months.

Meawhile, short interest on the tech issue fell by 31.58% during the last two reporting periods. However, these shorted shares still make up a respectable 8.98% of OVTI's available float, indicating that there are plenty of skeptics aboard the equity's bearish ship.

In terms of technical performance, OVTI has added over 57% so far this year, and has outpaced the broader S&P 500 Index (SPX) by more than 42% during the last 40 days. On the charts, the stock is already on track to close a third consecutive week above its 40-week moving average, a trendline that had been largely out of reach since late July.

In the morning hours of the session, OVTI remains flat with Friday's close of $19.26.


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