Skyworks Solutions, Inc. (SWKS) Bears Emerge as Semiconductors Tank

Skyworks Solutions Inc (SWKS) option bears are active as semiconductors take it on the chin

by Andrea Kramer

Published on Mar 25, 2015 at 1:20 PM
Updated on Apr 20, 2015 at 5:32 PM

Skyworks Solutions Inc (NASDAQ:SWKS) is just one of many semiconductor stocks taking it on the chin today. The shares have dropped 6.7% to trade at $94.64 -- surrendering a newfound foothold in triple-digit territory -- and option bears have come out swinging. Intraday put volume is running at three times the average pace, with speculators taking a shine to newly front-month contracts.

Digging deeper, the April 93 and 95 puts are most active, and data suggests the options are being bought to open. By purchasing the puts, the buyers expect SWKS to extend today's retreat beneath the respective strikes by the close on Friday, April 17, when the options expire. SWKS hit an intraday low of $94.02 earlier.

In the wake of SWKS' drop, delta on the 93-strike put has soared to negative 0.39 from negative 0.16 at yesterday's close, reflecting growing odds for an in-the-money finish on expiration day. Likewise, delta on the 95-strike put now sits at negative 0.49, compared to negative 0.21 last night. In other words, the contracts have about a 1-in-2 shot of expiring in the money.

Up until today, Skyworks Solutions Inc (NASDAQ:SWKS) was in rally mode. The stock touched a record high of $102.77 on Monday, bringing its 14-day Relative Strength Index (RSI) to a lofty 81 -- in overbought territory, suggesting today's breather may have been in the cards. At last check, the shares were testing their mettle atop their 20-day moving average, which -- along with its 10-day cohort -- has contained most of SWKS' pullbacks since October.

Daily Chart of SWKS since October 2014 with 10-Day and 20-Day Moving Averages

A Schaeffer's exclusive!

The Expert's Guide

Access your FREE trading earning announcements before it's too late!


 
 

Partnercenter


NEW! Explore Schaeffer’s Partners' deals and get connected to top online brokerages with deals tailored exclusively for our readers.  Get answers to your questions regarding transfer fees, commission rates, programs and available discounts related to online trading services.

MORE | MARKETstories


Look Who's Going Bankrupt Next in America
Porter Stansberry is making a concerning prediction.
First Week in April Provides More Coronavirus-Related Volatility
A slew of coronavirus-related news sent markets on another weekly roller coaster ride
Netflix Stock Heading into Historically Bullish Quarter
NFLX's 10-day moving average has stepped up as support lately
Look Who's Going Bankrupt Next in America
Porter Stansberry is making a concerning prediction.