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

by Andrea Kramer

Published on Oct 30, 2014 at 11:25 AM
Updated on Apr 20, 2015 at 5:32 PM

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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