Options Radar: Baidu Inc (ADR), Cirrus Logic, Inc., Facebook Inc (FB)

Reviewing notable options activity on Baidu Inc (ADR), Cirrus Logic, Inc., and Facebook Inc

Oct 30, 2014 at 11:25 AM
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Option traders have taken a shine to Chinese Internet issue Baidu Inc (ADR) (NASDAQ:BIDU), Apple Inc. (NASDAQ:AAPL) supplier Cirrus Logic, Inc. (NASDAQ:CRUS), and social networking titan Facebook Inc (NASDAQ:FB). Here's a look at how speculators have been placing their bets on BIDU, CRUS, and FB today.

  • Baidu Inc (ADR) (NASDAQ:BIDU) rocketed to a record high of $237.55 out of the gate, but has trimmed its lead to 4.2% to flirt with $233.90. The company -- often called the "Google of China" -- touted a "very strong" third quarter (subscription required), thanks to a surge in mobile traffic. As such, Pacific Crest, Barclays, and Piper Jaffray all upped their price targets on BIDU, and option traders are in a tizzy. Intraday options volume is running at four times the typical pace, and eight of the 10 most active contracts expire at tomorrow's closing bell. What's more, calls are outpacing puts -- a deviation from the norm. The stock's weekly 10/31 235- and 237.50-strike calls have seen a mix of buying and selling activity, and volume has surpassed open interest at both strikes, hinting at fresh eleventh-hour bets.

  • Despite reporting stronger-than-expected fiscal second-quarter earnings and offering up a solid current-quarter forecast, Cirrus Logic, Inc. (NASDAQ:CRUS) has dropped 10.2% to $19.68. The shares initially ticked higher in after-hours trading, but are now back below their 200-day moving average, landing on the short-sale restricted list. As such, bears are heading to the options pits, picking up CRUS puts at 10 times the average intraday rate. Furthermore, puts are outpacing calls by a margin of more than 2-to-1, marking a significant shift in sentiment among buyers. Digging deeper, skeptics are apparently buying to open weekly 10/31 21- and 21.50-strike puts, amid expectations for CRUS to extend its plunge through tomorrow's close, when the options expire.

  • Finally, Facebook Inc (NASDAQ:FB) is extending yesterday's post-earnings swoon, down 3.3% at $73.35, bringing its weekly drop to 9.1%. Options traders are rushing to place bets on the stock's end-of-week trajectory, with intraday volume running at twice the average rate. The security's 30-day at-the-money implied volatility has jumped 12% to 33.1%, and eight of the 10 most active options expire tomorrow night, underscoring a growing affinity for short-term contracts. Upon closer inspection, it looks like bulls are buying to open the weekly 10/31 74.50- and 76-strike calls, on hopes for FB to rebound north of the strikes by the end of the week. Meanwhile, the weekly 10/31 75-strike call has seen a mix of buy- and sell-to-open activity.
 

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