In mid-November, NXP Semiconductors NV (NASDAQ:NXPI) was trading near $74.70 -- record-high territory at the time. As such, option traders initiated short calls at the equity's December 77.50 strike on Nov. 11, expecting the stock to stall near this notable milestone.
Instead, NXPI went on to rally in the subsequent weeks, topping out at an all-time peak of $78.34 on Nov. 28. Recently, the shares have been consolidating in the $72.50-to-$73 region -- with NXPI last seen at $72.72. Against this backdrop, a number of the call sellers on Friday bought to close their December 77.50 positions to guard against a quick rebound for the semiconductor stock through week's end, when front-month options expire.
Elsewhere on the sentiment front, short sellers have been abandoning their bearish positions in droves, following the stock's trek into uncharted territory. Over the past two reporting periods, specifically, short interest plunged 46.1%, and now accounts for just 1.3% of the equity's available float. What's more, it would take less than one session to cover these shorted shares, at NXP Semiconductors NV's (NASDAQ:NXPI) average daily pace of trading.