Broadcom Stock Rally Cools Ahead of Earnings

Options are pricing in a much bigger post-earnings swing than usual

Digital Content Manager
Jun 12, 2019 at 11:10 AM
facebook X logo linkedin

The shares of Apple (AAPL) supplier Broadcom Inc (NASDAQ:AVGO) are cooling off slightly, down 1.6% at $279.01 ahead of the company's fiscal second-quarter earnings release after the close tomorrow, June 13. The shares just touched three-week highs yesterday following a seven-day win streak -- the longest since September 2018 -- but ran into a wall around the $290 area, where AVGO was trading before a May bear gap. This region is also where the shares landed after a post-earnings bull gap in March.

A post-earnings pop could be in the cards for the semiconductor concern, however, if recent history is any indicator. The stock has moved higher the day after its last three earnings reports, enjoying a whopping 8.2% surge after earnings in March. The options market is pricing in an even bigger 9.2% swing this time around, though, coming in much higher than the average 4.5% move after the last eight reports, regardless of direction.

As far as direction, it looks like the options crowd is betting bullishly. On the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), traders have bought to open nearly two Broadcom calls for every put in the past two weeks.

Echoing that, AVGO's Schaeffer's put/call open interest ratio (SOIR) of 0.60 sits in the 19th percentile of its annual range. This suggests that short-term options player have rarely been more call-heavy in the past 12 months. 


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 calls
238.5% GAIN on Oracle calls



Rainmaker Ads CGI