NCR Corporation (NCR) Traders Roll the Dice On a Rebound

NCR Corporation is reeling on preliminary quarterly numbers and a disappointing FY outlook

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Published on Oct 20, 2014 at 1:13 PM
Updated on Apr 20, 2015 at 5:09 PM

NCR Corporation (NYSE:NCR) has plunged 22% this afternoon to churn around $23.30 -- its biggest one-day drop on record -- after reducing its third-quarter earnings guidance and full-year outlook. In fact, the shares earlier hit a nearly two-year low of $22.83, and found a place on the short-sale restricted (SSR) list. Elsewhere, options are trading at triple the anticipated intraday rate, and the stock's 30-day at-the-money implied volatility has shot 7.3% higher to 46.2%, signaling elevated demand for short-term strikes.

Most active so far is NCR's January 2015 25-strike call, where 1,432 contracts have been exchanged. The majority have crossed at the ask price, and open interest is home to fewer than 100 contracts, suggesting the initiation of long call positions. In short, these traders expect NCR to rebound above the quarter-century mark by January 2015 options expiration.

As alluded to, NCR Corporation (NYSE:NCR) released preliminary third-quarter numbers earlier, and will issue its official results after the close next Tuesday afternoon. Elsewhere, in the wake of today's price action, Oppenheimer slammed the shares with a $10 price-target cut to $30, but nonetheless retained its "outperform" rating.


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