Qualcomm (QCOM) Option Traders Unconvinced

QUALCOMM, Inc. (QCOM) and China have settled an antitrust probe

Digital Content Group
Feb 10, 2015 at 12:01 PM
facebook X logo linkedin


QUALCOMM, Inc. (NASDAQ:QCOM) is on a tear around midday, adding 4.4% following the confirmed resolution of an antitrust investigation in China. The news has been met with applause from the analyst crowd, as BMO, Nomura, RBC, and FBR each upped their price targets on the stock. However, one group of options traders remains skeptical.

Taking a quick step back, QCOM calls are crossing at roughly three times the usual intraday rate, and triple the number of puts on the tape. However, not all of this activity is bullish in nature. Among the most active options is the weekly 3/6 72.50-strike call, which appears to be seeing sell-to-open activity. In other words, these call writers are banking on QCOM to remain below $72.50 through the close on Friday, March 6, when the weekly series expires. The equity hasn't toppled this level since late January, prior to a guidance-induced bear gap, and was last seen dancing near $70.

Over the past two weeks, call writing has been a popular strategy at the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX). In fact, 28,797 QCOM calls have been sold to open over the previous 10 days, more than doubling the 14,053 bought to open.

As alluded to, QUALCOMM, Inc. (NASDAQ:QCOM) has agreed to pay a record-breaking $975 million fine to Chinese authorities to end a 14-month antitrust probe, though the company called the terms "better than feared." In addition, the firm is being required to lower the royalty rates it charges on patents.

Daily Chart of QCOM since November 2014

 

Target Effortless Triple-Digit Gains Every Sunday Evening For Life!

This is your chance to triple your profit potential on Sunday evenings, without spending all your free time watching the market.

On Sundays, as a Weekend Plus subscriber, you’ll get up to 6 trades every Sunday, each targeting gains of 200% or more.

Start targeting gains like the ones our subscribers have seen recently, including:

213.3% GAIN on AutoNation calls
100.0% GAIN on Monster Beverage calls
100.4% GAIN on Walgreens Boots Alliance puts
100.4% GAIN on ON Semiconductor calls
257.7% GAIN on Dell calls

101.0% GAIN on Apollo Global Management calls
103.6% GAIN on JP Morgan  Chase calls
105.3% GAIN on DraftKings calls
101.3% GAIN on Airbnb calls
203.0% GAIN on Shopify calls
102.0% GAIN on Cboe Global Markets calls
100.9% GAIN on Boeing calls
102.1% GAIN on Microsoft puts
102.3% GAIN on First Solar calls
101.5% GAIN on PulteGroup calls
101.0% GAIN on Apple calls
209.4% GAIN on NXP Semiconductors calls
100.8% GAIN on Uber Technologies calls
100.4% GAIN on Academy Sports and Outdoors puts
102.2% GAIN on Trade Desk calls
100.8% GAIN on DoorDash calls
100.0% GAIN on Camping World Holdings puts
100.0% GAIN on Cboe Global Markets calls
100.2% GAIN on C3.ai calls
238.5% GAIN on Oracle calls

 
 
 


 
 

Rainmaker Ads CGI