Options Radar: Zillow Inc, Sierra Wireless, and NVIDIA Corporation

Reviewing notable options activity on Zillow Inc, Sierra Wireless, Inc. (USA), and NVIDIA Corporation

Nov 6, 2014 at 1:18 PM
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Three stocks seeing notable options activity today are online real estate concern Zillow Inc (NASDAQ:Z), mobile phone issue Sierra Wireless, Inc. (USA) (NASDAQ:SWIR), and chipmaker NVIDIA Corporation (NASDAQ:NVDA). Here's a quick look at how speculators have been placing their bets on Z, SWIR, and NVDA.

  • Zillow Inc (NASDAQ:Z) is down 3% at $100.72, as a hefty acquisition-related loss and soft current-quarter guidance overshadow the company's record third-quarter revenue. Adding to the bearish bias is a round of price-target cuts from no fewer than 10 brokerage firms. Among them is CRT Capital, which slashed its outlook by $32 to $108, while underscoring its "fair value" rating. This move lower has sparked a rare rush of put activity in the equity's options pits, with the contracts crossing the tape at a rate seven times the intraday average. Most active is Z's weekly 11/7 100-strike put, which is apparently seeing a mix of buy-to-open and sell-to-close activity, per data from the International Securities Exchange (ISE).

  • A strong third-quarter earnings report and better-than-expected current-quarter forecast helped lift Sierra Wireless, Inc. (USA) (NASDAQ:SWIR) to a 10-year peak of $33.87 earlier, with the shares last seen 25.7% higher at $33.35. The brokerage bunch was quick to weigh in on the results, with no fewer than eight firms raising their price targets on the shares. However, although Paradigm upped its target price to $21 from $20, it also reduced its rating to "sell." In the options pits, overall volume has soared to 12 times what's typically seen at this point in the day. Drilling down, bulls are buying to open the equity's March 35 call to gamble on longer-term gains, while bears are looking for a quick retreat by initiating new long positions at SWIR's November 30 put.

  • NVIDIA Corporation (NASDAQ:NVDA) option volume is running at 1.5 times the expected intraday amount, ahead of tonight's quarterly earnings report. Short-term traders are hoping for another post-earnings pop for the chipmaker, and are buying to open the equity's weekly 11/14 22-strike call. Meanwhile, longer-term speculators are eyeing technical struggles over the next several months. Specifically, the March 19 put is NVDA's most active option thus far, with 3,068 contracts on the tape. The majority of these have changed hands at the ask price, and volume outstrips open interest, making it safe to assume new positions are being purchased. At last check, the shares were down 0.7% to trade squarely at $20.

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