Skyworks Solutions, Inc. (SWKS) Short-Term Bulls Take Over After New High

Skyworks Solutions Inc (NASDAQ:SWKS) just hit a record high, and option bulls are rushing in

by Josh Selway

Published on May 18, 2015 at 2:06 PM
Updated on Jun 24, 2020 at 10:16 AM

Skyworks Solutions Inc (NASDAQ:SWKS) is booming after the company introduced a new line of switch solutions geared toward the Internet of ThingsIn addition, some speculators are attributing the upside to a halo lift from partner Apple Inc. (NASDAQ:AAPL) . The shares of SWKS were nearly 6% higher at $103.36, at last check -- after earlier hitting a record high of $103.75 -- and bullish betting is picking up in the stock's options pits.

Ahead of tomorrow's shareholder meeting, 21,000 calls have changed hands today, compared to fewer than 5,000 puts, as the contracts are running at three times the expected intraday pace. Traders have shown a strong preference for the weekly 5/22 contracts, which make up seven of SWKS' 10 most active options. In fact, the weekly 5/22 100-to-106-strike calls appear to be seeing buy-to-open activity, meaning traders are betting on SWKS to move deeper into triple-digit territory through week's end, when the contracts cease trading.

It's actually put buying that's been the trend in the stock's option pits coming into today. SWKS' 50-day put/call volume ratio at the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) comes in at 0.52 -- only 2 percentage points from an annual peak. This means put buying has been far more popular than normal.

Chances are, some of these put-focused traders are shareholders hedging their long bets, given Skyworks Solutions Inc's (NASDAQ:SWKS) impressive technical track record. The shares have easily doubled during the past year, and have outpaced the S&P 500 Index (SPX) by over 15 percentage points in the past three months. This may be why 13 of 15 brokerage firms say SWKS is a "strong buy."


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