Option Bears Swarm Corning Incorporated (GLW) Ahead of Earnings

Put volume on GLW is surging before Tuesday's earning report

by Kirra Fedyszyn

Published on Jan 25, 2016 at 11:35 AM

Ahead of tomorrow morning's quarterly earnings report, Gorilla Glass maker Corning Incorporated (NYSE:GLW) is attracting an abundance of bears to the option pits. The stock is trading 1.2% lower at $16.90 this morning, as the broader market pulls back.

However, negative price action is nothing new for GLW. The shares are off 7.5% so far in 2016, and 29.3% lower year-over-year. Since late March 2015, the stock has been unsuccessfully battling resistance from its 80-day, 160-day, and 200-day moving averages.

Today, GLW puts are crossing the tape at five times their typical intraday rate, with about 13,000 traded so far -- outnumbering calls by nearly 4-to-1. Buy-to-open action is happening at the February 17 put, where more than 9,200 contracts have already traded.

Looking at sentiment more broadly, today's appetite for puts is a change of pace for GLW option buyers. In the past 50 trading days, the stock has amassed a call/put volume ratio of 2.81 on the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) -- meaning nearly three calls were bought to open for each put during this period. Moreover, this ratio is higher than 75% of all comparable readings from the past year.

Short interest on the equity fell by more than 25% during the last two reporting periods, but the shares failed to benefit from this influx of buying pressure. Just under 5% of GLW's float remains dedicated to short interest, representing 5.2 times the stock's average daily volume.

But despite GLW's weak performance over the past year, four analysts still rate the stock a "buy" or better, and its average 12-month price target of $19.78 is at a level not seen since last July. Should tomorrow's earnings report fail to impress -- or should a post-earnings pop be thwarted by looming technical resistance -- an unwinding of bullish sentiment among analysts or a renewed push by short sellers could pressure Corning Incorporated (NYSE:GLW) toward new multi-year lows.

Sign up now for Schaeffer's Market Recap to get all the day's big stock movers, must-know technical  levels, and top economic stories straight to your inbox.

A Schaeffer's exclusive!

The Expert's Guide

Access your FREE trading earning announcements before it's too late!



NEW! Explore Schaeffer’s Partners' deals and get connected to top online brokerages with deals tailored exclusively for our readers.  Get answers to your questions regarding transfer fees, commission rates, programs and available discounts related to online trading services.

MORE | MARKETstories

The Nevada Discovery That Could Jeopardize Chinese Dominance
Click to continue to advertiser's site.
Billion-Dollar AT&T Loan Boosts Stock
T announced at $5.5 billion term-loan agreement today
SHOP Stock Fails to Shake Off Downgrade
Raymond James downgraded Shopify to "market perform" from "outperform"
The Top Lithium Play of 2020
Click to continue to advertiser's site.