Options Radar: Keurig Green Mountain Inc, Netflix, and Cirrus Logic

Reviewing notable options activity on Keurig Green Mountain Inc, Netflix, Inc., and Cirrus Logic, Inc.

Oct 20, 2014 at 2:02 PM
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Three stocks seeing notable options activity today are java giant Keurig Green Mountain Inc (NASDAQ:GMCR), streaming issue Netflix, Inc. (NASDAQ:NFLX), and integrated circuit specialist Cirrus Logic, Inc. (NASDAQ:CRUS). Here's a look at how today's options traders have been placing their bets on GMCR, NFLX, and CRUS.

  • GMCR is starting the week out with a bang -- up 3.4% to trade at $142.41. Today's positive price action is just more of the same for a stock that's tacked on more than 88% year-to-date, and more recently, outperformed the broader S&P 500 Index (SPX) by 19.7 percentage points over the past three months. In the options pits, though, put volume is trading at 1.5 times the typical intraday amount, and GMCR's 30-day at-the-money implied volatility has surged 11.6% to 46.3%, signaling elevated demand for short-term options. Drilling down, buy-to-open activity has been detected at Keurig Green Mountain Inc's weekly 10/31 132-strike put, as traders gamble on retreat for the shares through next Friday's close -- when the series expires.

  • Amid NFLX's steep 21% decline last week, the stock's 14-day Relative Strength Index (RSI) slid to 22 -- in oversold territory. This may explain why the security has bounced 1.5% today to trade at $362.63, or traders could just be cheering the company's newest collaboration. Regardless, option volume is running at a slightly accelerated pace, and all 10 of Netflix, Inc.'s most active options expire at this Friday's close. The equity's weekly 10/24 365-strike call has seen the most action, and is being bought to open for a volume-weighted average price (VWAP) of $7.08.

  • It could be a volatile two weeks for shares of CRUS. Specifically, Apple Inc. (NASDAQ:AAPL) -- from which Cirrus Logic, Inc. gets roughly 80% of its revenue -- will report earnings after tonight's close. Additionally, CRUS will take its own turn in earnings confessional after the close next Wednesday, Oct. 29. Over the past four quarters, the stock has averaged a single-session post-earnings loss of 4.1% -- including a nearly 14% plunge last October. Today, however, the equity is trading higher, and was last seen up 4.5% at $21.02. As such, call volume has soared to five times what's typically seen at this point in the day, and a number of speculators are betting on the security to extend today's positive price action through week's end. Specifically, speculators are buying to open CRUS' weekly 10/24 21-strike call for a VWAP of $0.39.

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