NXP Semiconductors NV (NXPI) Calls Hot as Earnings Impress

NXP Semiconductors NV's (NASDAQ:NXPI) post-earnings surge has prompted a rush toward calls

Apr 26, 2016 at 10:12 AM
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Following a recent trend in the semiconductor sectorApple Inc. (NASDAQ:AAPL) supplier NXP Semiconductors NV (NASDAQ:NXPI) turned in a well-received earnings report -- beating both top- and bottom-line estimates. As such, NXPI stock has jumped 6.2% to $88.49 -- a move that's more than likely getting mixed reactions among options traders.

Specifically, put buyers have been targeting the stock at a rapid-fire rate in recent weeks. At the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), for example, NXPI's 10-day put/call volume ratio of 1.74 sits higher than 74% of all comparable readings taken in the past year.

Yesterday, however, calls emerged as the options of choice, with buy-to-open activity detected at NXPI's weekly 4/29 94 strike. It's a trend that's continuing today, with calls crossing at seven times the average intraday rate -- outpacing puts by a significant margin -- and new positions being purchased at NXPI's May 94 strike.

However, there may have been an ulterior motive to yesterday's call-skewed session. Short interest on NXPI surged 37% in the two most recent reporting periods to roughly 8 million shares -- the most since mid-January. In other words, some of the call buying may have been a result of short sellers hedging against any post-earnings upside.

As noted, the shares are soaring today, and are now comfortably north of the $86 region -- an area that's contained the stock since mid-December. Longer term, shares of NXP Semiconductors NV (NASDAQ:NXPI) have shed 23% since topping out at a record peak last June.

NXPI daily chart April 26

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