Seagate Technology plc (STX) Bears Active Amid Sell-Off

Seagate Technology PLC's (NASDAQ:STX) weekly 5/22 57-strike put is in high demand

by Alex Eppstein

Published on May 19, 2015 at 11:57 AM
Updated on Jun 24, 2020 at 10:16 AM

Seagate Technology PLC (NASDAQ:STX) is 4% lower at $54.64, and has shed nearly 18% in 2015. In options land, contracts are crossing at double the amount expected at this point in the session, with a number of traders banking on extended downside for shares of the data storage firm.

STX's most active option today is the weekly 5/22 57-strike put. All indications point to buy-to-open activity at this in-the-money strike. Based on the volume-weighted average price (VWAP) of $0.96, these bearish speculators anticipate the stock will keep moving south of breakeven at $56.04 (strike less VWAP) through the end of the week, at which point the series expires.

Over the past few months at the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), STX put buying has been extremely popular. The equity's 50-day put/call volume ratio across those exchanges is 1.29 -- higher than 98% of comparable readings from the past 12 months.

Short sellers have also been on the prowl. During the two most recent reporting periods, short interest on Seagate Technology PLC (NASDAQ:STX) rose more than 12%, and now accounts for 8.6% of the security's total float. At the stock's typical daily trading levels, it would take nearly seven sessions to repurchase these positions.

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