Qualcomm (QCOM) Buyback Lures Last-Minute Bulls

QUALCOMM, Inc. (QCOM) is up on news of an accelerated share repurchase plan

May 21, 2015 at 10:58 AM

QCOM

QUALCOMM, Inc. (NASDAQ:QCOM) calls have been extremely popular in recent weeks at the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX). The telecom stock's 10-day call/put volume ratio across those exchanges is 4.94, with nearly five calls bought to open for every put. What's more, this ratio checks in just 3 percentage points from an annual high.

Calls are again flying off the shelves today, with 31,000 contracts on the tape -- four times what's expected at this point in the day. The biggest single trade centered on a block of now in-the-money 10,100 October 70 calls, which Trade-Alert suggests may be closing. Meanwhile, the weekly 5/22 70-strike call looks like it's seeing buy-to-open activity, as short-term bulls expect QCOM to extend its lead above $70 through tomorrow's close, when the series expires.

Currently, the shares are perched at $70.79, up 2.2% on news of an accelerated buyback agreement. However, QUALCOMM, Inc. (NASDAQ:QCOM) is sitting on a roughly 5% year-to-date deficit, and is facing overhead pressure at its descending 32-week moving average. Should the stock resume its longer-term downtrend, a capitulation among option bulls could result in headwinds.

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