Post-Earnings Call Players Pile On Applied Materials, Inc. (AMAT)

Call volume is soaring on Applied Materials, Inc. (NASDAQ:AMAT) in the wake of its fiscal second-quarter results

May 15, 2015 at 2:35 PM
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Put buying had been growing in popularity on Applied Materials, Inc. (NASDAQ:AMAT) in the weeks leading up to last night's quarterly earnings report. At the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), the stock's 10-day put/call volume ratio has jumped to 0.38 from 0.16 over the past two weeks, and now ranks in the 83rd annual percentile.

Today, though, in the wake of its fiscal second-quarter results, AMAT calls are trading at two times the average intraday rate, and are outpacing puts by a more than 4-to-1 ratio. What's more, with the scheduled event in the rearview mirror, the equity's 30-day at-the-money implied volatility plunged to a 52-week low earlier.

Most active is AMAT's May 20.50 call, where 8,560 contracts have changed hands thus far. It appears a portion of the activity is of the buy-to-open kind, as speculators bet on the stock to rally above the strike by tonight's close -- when front-month options expire.

Earlier, the equity topped out at an intraday high of $20.59, but was last seen up 2% at $20.25 after the company reported better-than-expected earnings. What's more, although RBC, J.P. Morgan Securities, and Credit Suisse all cut their price targets on Applied Materials, Inc. (NASDAQ:AMAT) overnight, D.A. Davidson said it was a "very stable" quarter, considering the failed $10 billion takeover bid of one of its rivals.


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