Options Check-Up: E*Trade Financial, Infinera, and Skyworks Solutions

Analyzing recent option activity on E*TRADE Financial Corp (ETFC), Infinera Corp. (INFN), and Skyworks Solutions Inc (SWKS)

Jan 22, 2015 at 8:14 AM
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Among the stocks attracting attention from options traders lately are online broker E*TRADE Financial Corp (NASDAQ:ETFC), optical services provider Infinera Corp. (NASDAQ:INFN), and semiconductor firm Skyworks Solutions Inc (NASDAQ:SWKS), which all report earnings tonight. Below, we'll break down how option buyers are positioning themselves, and how much speculators are willing to pay for their bets on ETFC, INFN, and SWKS.

  • Shares of ETFC have underperformed in 2015, with the equity down 9.2% year-to-date to rest at $22.02. However, E*TRADE Financial Corp options traders are bullish ahead of today's earnings report. ETFC's 50-day International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) call/put volume ratio of 16.63 reads higher than 94% of all similar readings taken over the past year. Meanwhile, near-term options for ETFC are neither expensive nor cheap, historically speaking, per its Schaeffer's Volatility Index (SVI) of 37%, which is in the 49th percentile of its annual range.

  • INFN has been a technical juggernaut, adding nearly 84.8% year-over-year to perch at $14.08. What's more, Infinera Corp. gained 3.15% yesterday ahead of today's earnings report, and has increased by an average of 16.3% in the session following its last four earnings reports. Not surprisingly, sentiment in the stock's options pits is overwhelming bullish. INFN's 50-day ISE/CBOE/PHLX call/put volume ratio of 37.15 is higher than 95% of all similar annual readings. It is important to note that about 12% of INFN's available float is sold short, though, so a portion of this call buying could be at the hands of short sellers hedging against the possibility of more upside. Short-term options for the security are currently expensive, relatively speaking, as its SVI of 65% sits in the 82nd percentile of its annual range.

  • SWKS has also been a technical outperformer, gaining a staggering 144.7% year-over-year to hit $77.30 -- including a fresh 14-year high of $77.34 just yesterday. Additionally, the semiconductor firm has added an average of 6.3% in the subsequent session following its last eight earnings reports. Surprisingly, sentiment in Skyworks Solutions Inc's options pits is trending bearishly, per its 10-day ISE/CBOE/PHLX put/call volume ratio of 0.52, which ranks in the 90th percentile of all similar readings taken over the past year. However, some of the recent put buying could be attributable to shareholders looking to lock in gains in the event of a dip. The stock's near-term options are slightly more expensive than usual, with its SVI of 46% sitting in the 60th percentile of all annual readings.

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