New Lows for Under Armour; Plus, the Sinking Apple Supplier

Options traders have been buying calls ahead of QUALCOMM earnings

by Emma Duncan

Published on Oct 31, 2017 at 10:33 AM

U.S. stocks are trading higher this morning, as traders digest the latest round of earnings and await word on the Federal Reserve. Among the stocks making moves this morning are athletic retailer Under Armour Inc (NYSE:UAA), digital technology company and Apple supplier (for now) QUALCOMM, Inc. (NASDAQ:QCOM), and drug concern Valeant Pharmaceuticals International Inc. (NYSE:VRX). Here's a closer look at what's moving shares of UAA, QCOM, and VRX.

Under Armour Takes a Post-Earnings Hit

Shares of Under Armour are plummeting after the company reported its first drop in quarterly revenue since going public in 2005, and slashed its full-year forecast amid increasing competition from rivals Nike (NKE) and Adidas. The retail stock is down 13.9% to trade at $14.13, and just off a fresh four-year low of of $13.81, now sporting a year-to-date loss of 51%.

UAA options traders are likely celebrating today. Data at the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) shows the athletic stock sports a 10-day put/call volume ratio of 1.02, ranking in the 76th percentile of its annual range. This suggests puts have been bought to open over calls at a faster-than-usual pace during the past two weeks. 

QCOM Stock Falls Amid Apple Rumors

QUALCOMM stock has taken a hit, after reports surfaced that Apple Inc (NASDAQ:AAPL) may not use parts from the company to create next year's iPhones and iPads. Prior to today, QCOM stock was 5.4% higher for October, and set to take on its 200-day moving average for the first time since the stock's massive bear gap in January. The stock was last seen 7% lower at $50.84, and in the red for the month. 

Ahead of QUALCOMM's earnings release tomorrow, options traders have picked up calls over puts at a much faster-than-usual pace. At the ISE, CBOE, and PHLX, the Apple supplier sports a 10-day call/put volume ratio of 3.89 that ranks in the 96th percentile of its annual range.

Valeant Pharmaceuticals Reduces Debt Earlier than Expected

Valeant stock is on the rise after the company said it will pay another $125 million in debt this week, and will meet its goal of reducing $5 billion debt earlier than expected. Valeant CEO Joe Papa stated, "We've over-delivered on strong cash flow, and we were also able to sell assets at double-digit multiples." VRX stock was last seen up 4.6% at $11.94, but struggling to take its 10-day moving average.

Today's bounce could've been in the cards, though. Valeant stock yesterday marked its lowest close since May, bringing its 14-day Relative Strength Index (RSI) to 22 -- in oversold territory. Options buyers are more call-heavy than usual, as evidenced by VRX's 10-day ISE/CBOE/PHLX call/put volume ratio of 3.32, higher than 79% of all other readings from the past year.

 
 

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