Nokia Corporation (NOK) Stumble Doesn't Shake Option Bulls

Calls are easily outpacing puts on Nokia Corporation (ADR) (NYSE:NOK) today, despite the stock's 11% post-earnings drop

Apr 30, 2015 at 1:09 PM
facebook X logo linkedin


Nokia Corporation (ADR) (NYSE:NOK) is down 10.8% this afternoon at an annual low of $6.68 -- and on the short-sale restricted list -- after the telecom concern's first-quarter profit miss raises eyebrows over its planned purchase of Alcatel Lucent SA (ADR) (NYSE:ALU). Options traders are keeping the faith, though, with calls crossing at two times the average intraday rate, and outpacing puts by a 6-to-1 margin.

Diving deeper, the equity's May 8 call has seen the most action today, and it appears some of the activity could be of the buy-to-open kind. By initiating these long calls, traders expect NOK to rally through the the $8 mark by the close on Friday, May 15 -- when front-month options expire.

Today's accelerated call activity is nothing new for NOK. At the ISE, Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), the equity's 50-day call/put volume ratio of 17.66 ranks in the 93rd annual percentile. In other words, calls have been bought to open over puts with more rapidity just 7% of the time within the past year.

Elsewhere on the Street, sentiment is more mixed toward a stock that -- until today -- had spent the majority of the past seven months in a tight trading range. Nine out of 13 analysts, for example, maintain a "hold" or "sell" recommendation on Nokia Corporation (NYSE:NOK). However, the average 12-month price target of $9.45 sits in territory not charted since February 2011.

 

Unlock Weekend Profits with Chris Prybal's Favorite Strategy Up +487.5% in 2024

With the markets going left, right, and sideways, you need to have a plan now more than ever. 

Expert Trader Chris Prybal is no stranger to volatility, and has mastered finding big stock rallies while other traders aren't looking over the weekend. Rallies that produced gains like +207% on RTX calls, +236% on MARA calls, and +238% on NET calls.

A few simple moves on Sunday at 7pm could be the “Secret Sauce” your portfolio needs to not just stay afloat, but make unprecedented gains in this turbulent market.


Don’t sit on the sidelines, beat the market with Chris Prybal's strategy. Join him now!