Software concern Splunk Inc (NASDAQ:SPLK) is off 6.3% today at $66.61, even after the company's first-quarter earnings beat and upwardly revised guidance was met with a round of bullish analyst attention. No fewer than six brokerage firms raised their price targets on the stock, including Susquehanna, which set its price target at $84. Nevertheless, eleventh-hour traders are betting on more downside, with puts crossing at nine times the expected intraday pace.

The weekly 5/29 series is extremely popular, accounting for nine of SPLK's 10 most active contracts, as traders try to profit before today's close, when the contracts expire. The most popular option overall is the 5/29 69-strike put, with the 68-strike put also seeing its fair share of attention. It looks like traders are buying these contracts to open, betting on SPLK's losses to steepen this afternoon.

Put buying has been the trend for some time now in SPLK's option pits. Going by data from the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), the stock's 50-day put/call volume ratio of 0.69 is higher than 78% of readings from the past year. Said simply, put buying has been more popular than usual in the past 10 weeks.

We can reinforce this theory by looking at SPLK's Schaeffer's put/call open interest ratio (SOIR) of 1.22, which shows put open interest outweighs call open interest among options expiring in the next three months. Plus, this reading lands in the 93rd percentile of its annual range, meaning near-term traders have taken a greater-than-usual interest in puts over calls.

It's not like Splunk Inc (NASDAQ:SPLK) hasn't done well on the charts. In fact, prior to today, the shares had outperformed the S&P 500 Index (SPX) by over 19 percentage points in the past two months.

Analysts are weighing in today on data storage focus Western Digital Corp (NASDAQ:WDC), semiconductor concern Integrated Device Technology Inc (NASDAQ:IDTI), and footwear retailer DSW Inc. (NYSE:DSW). Here's a quick look at today's brokerage notes on WDC, IDTI, and DSW.

• A bullish note from Goldman Sachs has WDC 5% higher today at $99.06. Specifically, the brokerage firm raised its outlook on the stock to "buy" from "neutral" and lifted its price target to $122 from $106, saying the stock's current price doesn't fully account for the company's non-PC exabyte growth. Most brokerage firms share this bullish sentiment, with 15 of 19 calling Western Digital Corp a "buy" or better. This, despite the equity underperforming the S&P 500 Index (SPX) by more than 11 percentage points in the past three months.


• IDTI has added 3.3% to trade at $23.94 -- and earlier touched a nearly 13-year high of $24.15 -- after some positive analyst attention. For instance, Wedbush and Topeka Capital each raised their price targets on the stock, to $23 and $29, respectively. Integrated Device Technology Inc is now up 77% in the past 12 months, but short-term option traders are still more put-skewed than normal, according to its Schaeffer's put/call open interest ratio (SOIR). At 1.44, this reading is only 2 percentage points from an annual high.


• DSW has given back 2.8% today to trade at $34.17, after Goldman Sachs waxed pessimistic on the shares -- despite the company's encouraging first-quarter results. The brokerage firm removed the stock from its "America's Buy" list (as it also did to this more upscale retailer), cut its assessment to "neutral" from "buy," and reduced its price target to $37 from $44. After all that, DSW Inc. is now 8.4% below breakeven in 2015, and option traders are likely dissatisfied. The security's 50-day International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) call/put volume ratio of 17.43 is only 3 percentage points from an annual bullish peak.

A number of major FIFA sponsors have expressed disappointment with the organization in the wake of the recent bribery scandal and subsequent arrests. Visa Inc (NYSE:V) is one of the companies, saying it is expecting "swift and immediate steps" from FIFA, otherwise it will re-evaluate its support. Following the reports (and amid a broad-market decline), V has shed 0.5% to trade at $69.14 -- extending its recent retreat from record highs -- a move that option traders have been anticipating.

In fact, at the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), V's 10-day put/call volume ratio of 1.18 ranks in the 83rd percentile of its annual range. In other words, puts have been bought to open over calls at a faster-than-usual clip in recent weeks.

Outside of the options pits, sentiment toward V is more mixed. Among the brokerage bunch, for example, 19 of 24 analysts maintain a "buy" or better rating, with not a single "sell" to be found. Meanwhile, the average 12-month price target of $74.40 represents a slim 7.6% premium to current trading levels -- but sits in territory yet to be charted.  Elsewhere, less than 3% of the stock's float is sold short, yet at V's average daily pace of trading, it would take more than a week to cover these shorted shares.

Technically speaking, Visa Inc (NYSE:V) has been making a series of higher highs in 2015, resulting in a year-to-date gain of 5.5%. What's more, the shares topped out at $70.69 -- their loftiest perch to date -- on May 15. As such, it's possible some of the recent put buying -- particularly at out-of-the-money strikes -- is a result of shareholders protecting paper profits against a pullback.

It seems as if FireEye Inc (NASDAQ:FEYE) can't be stopped. Today, the shares hit a new 52-week peak of $47.18, and were last seen up 4.6% at $47.1. Stoking the bullish bias is an upwardly revised offering -- which has some speculating once again about a potential takeover -- and possibly recent hacks at Ctrip.com International, Ltd. (ADR) (NASDAQ:CTRP) and the IRS, all of which may be discussed at next Wednesday's analyst meeting. However, not everyone is convinced the stock can continue its run, with a number of option traders eyeing an end-of-week pullback.

Taking a quick step back, FEYE puts are trading at two times the average intraday pace today. The equity's weekly 5/29 46-strike put is seeing heavy action, and it appears eleventh-hour speculators are purchasing new positions here. Amid today's rally, delta on the now out-of-the-money put has moved to negative 0.29 from negative 0.72 at last night's close, signaling a decreased probability of an in-the-money finish at tomorrow's close, when the contracts expire. 

Widening the scope reveals put players have been more active than usual in recent months. At the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), FEYE's 50-day put/call volume ratio of 0.39 ranks in the 69th percentile of its annual range. While some of this put buying may be a result of shareholders protecting paper profits, skepticism toward FEYE is seen outside of the options pits, as well.

In fact, 11.6% of the stock's float is sold short, representing over four days' worth of pent-up buying demand, at FireEye Inc's (NASDAQ:FEYE) average daily pace of trading. Plus, more half of analysts covering the shares maintain a "hold" or worse recommendation. Should FEYE extend its trek in annual-high territory, an unwinding of the pessimism surrounding it could translate into additional gains.

Electric vehicle maker Tesla Motors Inc (NASDAQ:TSLA) is bucking the broad-market trend lower today, up 1.5% at $251.08. What's more, options traders are rolling the dice on even more very short-term upside for the stock.

TSLA calls have changed hands at a 30% mark-up to the security's average intraday pace, and options expiring after the close tomorrow make up the 10 most active strikes. Furthermore, the stock's 30-day at-the-money implied volatility has jumped 3.5% to 31.4%, but remains near an annual low. 

Digging deeper, it looks like eleventh-hour bulls are buying to open weekly 5/29 250-, 252.50-, and 255-strike calls -- the three most popular options thus far. By doing so, the speculators expect TSLA to be sitting north of the respective strikes by expiration tomorrow night. 

Since touching an annual low of $181.40 in late March, TSLA has advanced 38.4%. The shares are now on pace to end the month atop their 10-month moving average for the first time since November. As a result of the stock's ascent, though, its 14-day Relative Strength Index (RSI) is perched at 70 -- in overbought territory, suggesting a near-term breather could be on the horizon.

Meanwhile, short sellers have been hitting the bricks amid TSLA's advance. However, while short interest fell 7.9% during the most recent reporting period, these bearish bets still account for more than a quarter of TSLA's total available float -- representing more than a week's worth of pent-up buying demand, at the equity's average pace of trading. Should TSLA continue to muscle higher, a short squeeze could add fuel to the automaker's fire.

Off the charts, Tesla Motors Inc (NASDAQ:TSLA) traders don't seemed concerned about potential competition from Ford Motor Company (NYSE:F). Meanwhile, speculators are digesting partnerships with Southern Co (NYSE:SO) and Ireland-based Gaelectric, as well as the latest chapter in CEO Elon Musk's Hyperloop adventure.

United Rentals, Inc. (NYSE:URI) call buyers have cranked it into high gear of late. At the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), the stock's 10-day call/put volume ratio of 2.36 outranks 92% of comparable readings from the previous year. Echoing this, URI's Schaeffer's put/call open interest ratio (SOIR) sits at an annual low of 0.63.

Things are markedly different today, amid URI's sell-off. At last check, puts are changing hands at 13 times the typical intraday pace. Most active is the weekly 6/4 94 strike, where buy-to-open activity is transpiring, according to Trade-Alert. These speculators anticipate the stock will breach $94 by the close next Friday, June 4, when the series expires.

Historically speaking, URI hasn't traded south of $94 in more than a month. However, with the shares 9% lower at $95.13 -- making them the biggest decliner on the S&P 500 Index (SPX) -- delta on the option has moved to negative 0.39 from negative 0.038 at Wednesday's close, signaling a higher probability of an in-the-money finish for the put.

Shorts sellers would welcome additional downside. Short interest on URI jumped 18.6% during the two most recent reporting periods, and now comprises 12% of the stock's total float -- or one week's worth of trading, at average trading levels.

On the fundamental front, United Rentals, Inc. (NYSE:URI) is feeling the weight of broad-market headwinds. More than that, during an appearance at the KeyBanc Capital Markets 2015 Industrial, Automotive and Transportation Conference, CEO Michael Kneeland reportedly said May revenue has been "a little softer" than expected.

Costco Wholesale Corporation (NASDAQ:COST) is down 0.8% at $144.25 today, as traders respond to the company's mixed fiscal third-quarter results. In the stock's option pits, calls are crossing at nearly four times the expected intraday pace. One of the more popular call options is the weekly 5/29 145 strike, which looks to be seeing buy-to-open activity. This means traders are looking for COST to topple $145 by tomorrow's close, when the series expires.

Recently, the stock's option pits have been marked by put buying. During the past 10 weeks at the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), COST has accumulated a put/call volume ratio of 0.82, which ranks higher than 70% of readings from the past year.

Many analysts have also taken skeptical stance. Of the 21 brokerage firms with coverage on the shares, nine rate them a tepid "hold." Plus, the average 12-month price target of $155.09 represents a slim 7.1% premium to current trading levels.

All of this skepticism is strange, given the stock's technical history. Over the past 12 months, Costco Wholesale Corporation (NASDAQ:COST) has added over 26%, and hit an all-time high of $156.85 early February. If COST can regain the momentum it's used to seeing on the charts, some of this pessimism could translate into tailwinds.

Ulta Salon, Cosmetics & Fragrance, Inc. (NASDAQ:ULTA) options are running wild ahead of the company's first-quarter earnings report tonight. Overall intraday volume, in fact, is at seven times the expected level.

ULTA's most active strike is the June 165 call, where traders may be purchasing new positions. These potential call buyers think the stock will rally above $165 -- and into record-high territory -- by the close on Friday, June 19, when front-month options expire.

Today's bullish bettors are simply reflecting longer-term trends witnessed at the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX). During the last two weeks at these exchanges, 4.31 calls have been bought to open for every put -- a ratio that ranks in the 96th percentile of its annual range.

This optimistic bias is understandable, considering Ulta Salon, Cosmetics & Fragrance, Inc.'s (NASDAQ:ULTA) 20% year-to-date advance to hover around $153.24. More upside could be ahead following tonight's earnings report, too. Over the past eight quarters, the stock has moved an average of 12.2% in the session adjacent to reporting -- seven of which were to the upside.

Call traders are flooding eBay Inc's (NASDAQ:EBAY) options pits today, with the contracts crossing at six times the average intraday pace. By the numbers, 62,000 calls have changed hands versus fewer than 8,900 puts. Meanwhile, short-term contracts are in high demand, as evidenced by EBAY's 30-day at-the-money implied volatility, which is up 13.4% at 20.1%.

Most active by a mile is the July 62.50 call, where more than 18,200 contracts are on the tape. It seems safe to assume new positions are being purchased here for a volume-weighted average price (VWAP) of $0.87, making breakeven for today's call buyers $63.37 (strike plus VWAP). A move north of here would mark a record high for shares of EBAY.

Today's accelerated call activity just echoes the withstanding trend seen in EBAY's options pits in recent months. At the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), the stock's 50-day call/put volume ratio of 2.79 sits in the 86th percentile of its annual range.

Looking at the charts reveals eBay Inc (NASDAQ:EBAY) has put in a strong technical showing of late. Since hitting its most recent low of $55.40 in mid-April, the stock has tacked on 9.4%. What's more, at $60.63, the shares are currently lingering just south of their all-time peak of $60.93, tagged on March 9.

Remember all the way back to … last week? You know, that time when spring was in the air and the CBOE Volatility Index (VIX) was in the 12s?

We were so carefree and complacent back then. But turns out maybe we should have been a bit more concerned? This, from Barron's:

"Rebecca Cheong, head of Americas equity derivatives strategy at UBS says on Friday that the VIX is unusually low compared with similar readings of expected price swings in European stocks, 10-year Treasury notes, the euro currency, oil and gold.

"Cheong says that the VIX doesn't tend to stay low versus all assets for long, which means that she expects the U.S. stock market to roll over in the month ahead. Since 2013, she finds that a VIX reading under 12 at the same time that the VIX is subdued relative to other assets 'implies investors were under-hedged when global risks rose,' and that the S&P 500 'lost as much as 5% in the following month.' When this happened in August 2013 and December 2014, the S&P 500 was lower both times."

Should we worry? Well, we're talking a sample size of two here, so that immediately gets me thinking that I can't prove or disprove anything. Do FIFA indictments cause big market rallies? They did yesterday, so there must be a connection!

I'm not even sure this VIX "rule" even worked those two times. Here's VIX vs. 10-year Treasury vol (VXTYN) going back to 2013.

We did see a big vol disparity in 2013, and again in late 2014. In gold (GVX)?

In 2013 -- yes. In late 2014, though? Not so much. And then there's oil (OVX).

There's nothing in 2013, but we did see a disparity in late 2013. But that disparity got larger and larger, and really the biggest disparity actually "predicted" a stock rally. And finally, there's volatility in the euro (EVX).

It's kind of similar to oil vol: nothing until late last year, and actually more "predictive" of a stock rally than anything else.

So, we really have a volatility lift in Treasuries and gold in 2013; not confirmed so much in oil vol, euro vol, or the VIX. And in 2013 into 2014, we had a relative vol lift in oil that has now dissipated. We're left now with relatively high Treasury and euro vol.

I really just don't see the case where this will lead us into any sort of doom. My best read is that volatility sloshes around a bit between asset classes. Perhaps we're due for a lift in stock volatility. It's now almost five months since the last noteworthy spike, so it's a reasonable call anyway. I just don't see the case that there's anything abnormal about spots of volatility around the investing sphere or that said volatility has enormous predictive value.

Disclaimer: Mr. Warner's opinions expressed above do not necessarily represent the views of Schaeffer's Investment Research.

Analysts are weighing in today on car manufacturer General Motors Company (NYSE:GM), cybersecurity provider Palo Alto Networks Inc (NYSE:PANW), and pharmaceutical name Valeant Pharmaceuticals Intl Inc (NYSE:VRX). Here's a quick roundup of today's bullish brokerage notes on GM, PANW, and VRX.

• GM has added 1.1% in pre-market trading, thanks in part to Morgan Stanley, which upgraded the stock to "equal weight" from "underweight." This comes after yesterday's news that lawsuits pertaining to the company's ignition switch issues will be put on hold. Looking back, the shares hit an annual high of $38.99 on March 23, but have given back 8.2% since, settling at $35.81 yesterday. Regardless, call buying has been popular lately. General Motors Company's 10-day International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) call/put volume ratio comes in at 3.81, higher than 88% of all readings from the past year.


• With its close yesterday at $160.65, PANW has easily doubled in the past year. The stock looks poised to continue that success today, pointed 1.2% higher ahead of the open after the company's fiscal third-quarter figures -- and purchase of fellow cybersecurity firm CirroSecure -- were met with a round bullish analyst attention. No fewer than 10 brokerage firms raised their price targets on the equity, with JMP Securities setting the highest bar by far, with a price target of $210. This favorable attention from the Street is nothing new; 17 of 20 brokerage firms say Palo Alto Networks Inc is a "buy" or better. What's more, the stock's recent crop of option bulls are likely cheering the news.


• FDA approval on the company's irritable bowel syndrome (IBS) drug, Xifaxan, has VRX moving higher in electronic trading. The shares are poised to open 1.4% higher -- and in uncharted territory -- ready to add to their 67.1% year-to-date lead, as of yesterday's close at $239.12. In the option pits, traders have been buying to open puts at an accelerated rate. Valeant Pharmaceuticals Intl Inc's 50-day ISE/CBOE/PHLX put/call volume ratio of 1.23 is only 4 percentage points from an annual high. However, given the stock's impressive technical performance, it's could be that some of this activity is from shareholders hedging against any downward moves in the underlying.

Futures are lower this morning, on reports a Greece debt deal may not happen. Back on the homefront, semiconductor specialist Avago Technologies Ltd (NASDAQ:AVGO), wearable camera maker GoPro Inc (NASDAQ:GPRO), and oil-and-gas issue Seadrill Ltd (NYSE:SDRL) are all garnering their fair share of attention.

• Confirming yesterday's speculation, AVGO said it will purchase sector peer Broadcom Corporation (NASDAQ:BRCM) for $37 billion in cash and stock -- making it the biggest purchase in the semiconductor space to date. The news is being received well on the Street, with shares of AVGO up 3.3% in electronic trading -- and on track to notch a new record high. Longer term, the stock has been a technical standout, boasting a nearly 41% year-to-date lead. A continued rise could prompt some price-target hikes. Avago Technologies Ltd's average 12-month price target of $142.38 is within a chip-shot of last night's close at $141.49. In other news, the company reported better-than-expected fiscal second-quarter earnings last night.


• GPRO has been charting a path steadily higher in recent months -- a move analysts have started taking note of -- tacking on 43.5% from its March 10 low of $37.13 to trade at $53.28. The stock looks poised to add to these gains today -- up 6% ahead of the bell -- following reports the company plans to build its own quadcopter, which CEO Nick Woodman says is "in some ways the ultimate GoPro accessory." GoPro Inc could get an additional boost, too, should short sellers capitulate to the equity's upward momentum. Although short interest dipped 3% in the latest reporting period, it still accounts for 39% of the equity's available float.


• It's been a volatile month for SDRL, and today, the shares are signaling a lower start. Stoking the day's bearish bias is a downbeat outlook on the global rig market, with Seadrill Ltd predicting a struggling oil market through 2016 -- which comes despite the firm's first-quarter earnings beat. On the charts, the stock has shed 68.5% since hitting an annual high of $40.44 in late June, and settled Wednesday at $12.73. More recently, the shares have encountered a stern layer of resistance from their 160-day moving average. Meanwhile, in the options pits, short-term speculators have shown a distinct preference for puts over calls. In fact, SDRL's Schaeffer's put/call open interest ratio (SOIR) of 1.56 rests in the 86th percentile of its annual range.