3 Apple Suppliers Swooning on iPhone 6 Beijing Ban

Apple Inc. (NASDAQ:AAPL) suppliers Broadcom Ltd (NASDAQ:AVGO), Cirrus Logic, Inc. (NASDAQ:CRUS), and Skyworks Solutions Inc (NASDAQ:SWKS) are lower after Beijing regulators banned the iPhone 6 on a patent ruling

by Alex Eppstein

Published on Jun 17, 2016 at 10:55 AM
Updated on Jun 17, 2016 at 11:06 AM

Shares of Apple Inc. (NASDAQ:AAPL) are sliding, after Chinese regulators ordered the company to stop selling the iPhone 6 and iPhone 6 Plus in Beijing due to patent infringement. The news is weighing on AAPL suppliers, too, with stocks like Broadcom Ltd (NASDAQ:AVGO), Cirrus Logic, Inc. (NASDAQ:CRUS), and Skyworks Solutions Inc (NASDAQ:SWKS) struggling. Below, we'll take a closer look at the losses, and how the options market is positioned on each stock.

AVGO was last seen 1.8% lower at $155.83. Longer term, however, the shares have been muscling higher since their February lows, and just touched a record high of $166 two weeks ago on upbeat earnings. At the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), traders have been wagering on additional upside. Specifically, Broadcom Ltd's 10-day call/put volume ratio of 2.15 ranks in the high 81st percentile of its annual range.

CRUS has shed 1% to trade at $37.20, but still isn't far from its annual high of $38.48, notched in late April. Yet, in the options pits, bearish betting has accelerated in recent months. Specifically, Cirrus Logic, Inc.'s 50-day ISE/CBOE/PHLX put/call volume ratio of 2.93 sits just 4 percentage points from a 12-month high. In other words, options traders have been hoping for (or hedging against) a pullback in the semiconductor stock.

Lastly, SWKS has dropped 1.4% to hover near $63.89, and unlike its sector peers, the stock is a long-term laggard. One year ago, in fact, the shares were sitting in triple-digit territory, but have since lost about 42% of their value. If options traders have their druthers, Skyworks Solutions Inc will extend its negative momentum. The stock's 10-day ISE/CBOE/PHLX put/call volume ratio of 1.49 ranks just 7 percentage points from an annual peak. This put-skew is reflected in SWKS' near-term open interest levels, as well.

Separately, Apple Inc. (NASDAQ:APPL) supplier Synaptics, Incorporated (NASDAQ:SYNA) has spiraled 9.4% lower. However, unlike the other tech stocks, this has less to do with AAPL, and more to do with freshly announced cost-cutting measures.

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