New CEO Has Cisco System, Inc. (CSCO) Bulls Hungry

Cisco Systems, Inc. (NASDAQ:CSCO) bulls have emerged after a new CEO was announced

by Josh Selway

Published on May 4, 2015 at 11:40 AM
Updated on May 4, 2015 at 11:40 AM

Cisco Systems, Inc. (NASDAQ:CSCO) is 0.3% higher today at $29.22, after the company announced CEO John Chambers is stepping down, with Chuck Robbins filling the position. In response, options traders have stepped up, with calls running at an 18% mark-up to the average intraday pace. The most popular contract is the May 30 call, which it appears traders are buying to open, expecting the shares to topple $30 by the close on Friday, May 15, when front-month options expire.

Looking back, calls have been popular in CSCO's options pits for some time. At the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), the stock has amassed a 50-day call/put volume ratio of 3.98 -- ranking higher than 95% of all readings from the past year. This reveals that calls have been bought to open over puts at a near-annual-high clip.

Most analysts are believers in the equity, with 19 of 26 brokerage firms deeming it a "buy" or better. Cisco Systems, Inc.'s (NASDAQ:CSCO) technical success may be one reason for this optimism. Over the past 12 months, the stock has added 27.3%, and is currently on the doorstep of its multi-year peak of $30.31 from early March.


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