Eleventh-Hour Traders Bet Bullishly on Hewlett-Packard Company (HPQ)

Options traders look for Hewlett-Packard Company (HPQ) to topple $40 by today's close

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Published on Jan 2, 2015 at 11:27 AM
Updated on Apr 20, 2015 at 5:32 PM

Speculators in Hewlett-Packard Company's (NYSE:HPQ) options pits are betting on a move higher by the end of the day. Overall, calls are trading at a 67% mark-up to what's normally seen at this point in the session, with traders eyeing the weekly 1/2 40 strike in particular.

This strike has seen over five times as many contracts change hands than the next most active, and it appears most of this activity is of the buy-to-open variety. These traders are hoping for HPQ to rally past $40 by today's close, when the weekly contracts expire.

Daily chart of HPQ since October 2014

The security has settled above the $40 level in each of the past six sessions, but was last seen just below this mark, down 0.5% at $39.93. From a longer-term standpoint, HPQ has soared more than 26% since its mid-October trek south of $32, and tagged a three-year high of $40.95 last Friday.

Today's preference for calls is a complete 180 to what's previously been seen in the security's options pits. For example, Hewlett-Packard Company's (NYSE:HPQ) 10-day International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) put/call volume ratio of 1.56 is at an annual bearish peak. However, some of this activity could be contributed to shareholders hedging against a downward move in the stock, given its roughly 44% year-over-year advance.


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