Call Buyers Crowd Corning Incorporated (GLW), Despite Steeper Premiums

Call buyers are big on GLW, but options are getting pricey on the Gorilla Glass parent ahead of earnings

Jan 8, 2016 at 12:12 PM
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With the Consumer Electronics Show (CES) coming to a close, attendees and consumers around the world are taking stock of the myriad new gadgets and innovations shown throughout the week. Meanwhile, Corning Incorporated (NYSE:GLW) -- the maker of Gorilla Glass -- spent its time at CES on the prowl for a software partner to help make its "Day Made of Glass" vision a reality.

GLW shed more than 20% of its value in 2015, and the stock has spent the last several months stuck in a choppy sideways channel between the $16 and $19 levels. GLW is trading 0.9% higher at $17.25 today, right near the midpoint of this range. Understandably, analysts have been wary of the equity -- out of 13 brokerages providing coverage, only four rate the stock a "buy" or better.

Meanwhile, option traders have been bullish in the extreme. At the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), the stock boasts a 10-day call/put volume ratio of 38.35. This reading arrives in the 100th annual percentile, pointing to peak levels of bullish speculation on the stock. In fact, total call open interest on GLW currently stands at 332,004 contracts -- a figure that arrives in the 97th percentile of its annual range.

However, with the company's fourth-quarter earnings due out at the end of January, it's an expensive time to be a buyer of Corning Incorporated (NYSE:GLW) premium. Trade-Alert pegs the stock's 30-day at-the-money implied volatility at 37.2%, in the lofty 95th annual percentile.


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