Time to Buy Puts on This Apple Supplier

Qorvo's short-term options are relatively cheap at the moment

Feb 14, 2018 at 12:46 PM
facebook X logo linkedin


Shares of Qorvo Inc (NASDAQ:QRVO) gapped more than 16% high on Feb. 1, after reports of an iPhone supply deal sparked a round of bullish analyst attention. QRVO stock topped out at at two-year high of $85.24 that day, but quickly pulled back to the $74-$75 region, home to its late-January highs. And while the equity has since been trading above support at its 10-day moving average, short-term losses could be on the horizon for the Apple supplier, if history is any guide.

Specifically, QRVO has been one of the worst stocks to own on the S&P 500 Index (SPX) during Presidents Day week, per data from Schaeffer's Senior Quatitative Analyst Rocky White. Looking back over the past 10 years, the equity has finished the holiday-shortened week in positive territory only three times, and has averaged a loss of 3.58%. Based on the stock's current perch at $78.56 -- down 1% so far today -- another move of this kind would put it near $75.74, below the aforementioned trendline.

Options traders have been bracing for more downside for QRVO shares, too. At the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), the stock's 10-day put/call volume ratio of 1.73 ranks higher than 84% of all comparable readings taken in the past year, meaning puts have been bought to open over calls at a faster-than-usual clip.

It's an attractive time to bet on the stock's short-term trajectory with options, though. QRVO's Schaeffer's Volatility Index (SVI) of 35% ranks in the 27th annual percentile, indicating muted volatility expectations are being priced into near-term contracts. And regardless of where the stock settles at expiration, the most options buyers stand to lose is the initial premium paid.

 

Target Effortless Triple-Digit Gains Every Sunday Evening For Life!

This is your chance to triple your profit potential on Sunday evenings, without spending all your free time watching the market.

On Sundays, as a Weekend Plus subscriber, you’ll get up to 6 trades every Sunday, each targeting gains of 200% or more.

Start targeting gains like the ones our subscribers have seen recently, including:

213.3% GAIN on AutoNation calls
100.0% GAIN on Monster Beverage calls
100.4% GAIN on Walgreens Boots Alliance puts
100.4% GAIN on ON Semiconductor calls
257.7% GAIN on Dell calls

101.0% GAIN on Apollo Global Management calls
103.6% GAIN on JP Morgan  Chase calls
105.3% GAIN on DraftKings calls
101.3% GAIN on Airbnb calls
203.0% GAIN on Shopify calls
102.0% GAIN on Cboe Global Markets calls
100.9% GAIN on Boeing calls
102.1% GAIN on Microsoft puts
102.3% GAIN on First Solar calls
101.5% GAIN on PulteGroup calls
101.0% GAIN on Apple calls
209.4% GAIN on NXP Semiconductors calls
100.8% GAIN on Uber Technologies calls
100.4% GAIN on Academy Sports and Outdoors puts
102.2% GAIN on Trade Desk calls
100.8% GAIN on DoorDash calls
100.0% GAIN on Camping World Holdings puts
100.0% GAIN on Cboe Global Markets calls
100.2% GAIN on C3.ai calls
238.5% GAIN on Oracle calls

 
 
 


 
 

Rainmaker Ads CGI