Option Bear Takes a Big Swipe at Cisco Systems, Inc. (CSCO)

Cisco Systems, Inc. (CSCO) put options are trading at five times the expected intraday rate

Oct 12, 2016 at 11:56 AM
facebook X logo linkedin


Tech names are tanking today, and Cisco Systems, Inc. (NASDAQ:CSCO) is no exception. According to Trade-Alert, the stock was last seen 3.2% lower at $30.04 in sympathy with Fortinet Inc (NASDAQ:FTNT), just a day after dropping 1.4%. Meanwhile, CSCO's put options are being exchanged at five times the usual intraday clip, and register in the 99th annual percentile.

Diving right in, puts account for seven of the stock's 10 most active options. Leading the way is the weekly 10/14 30.50 strike, where it seems that a fresh sweep of 4,342 contracts was purchased for $0.20 apiece -- resulting in a total net debit of roughly $87,000 (premium paid * number of contracts * 100 shares per contract). In so doing, the trader is expecting CSCO to settle this Friday -- when the weekly series expires -- south of $30.50, or risk losing the initial premium paid.

Today's trend toward long puts represents a break from the prevailing trend toward calls. During the last two weeks at the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), traders have bought to open twice as many calls as puts, amid persistent M&A buzz.

Call selling has been extremely popular on CSCO, as well. Based on data from the major exchanges, 34,592 contracts have been sold to open over the past two weeks, versus 19,829 that were bought to open. For instance, the stock's January 2017 30-strike call has seen the biggest increase in open interest over the past 10 sessions, and ISE, CBOE, and PHLX numbers confirm nearly 16,000 contracts have been sold to open in recent months.

As alluded to, Cisco Systems, Inc. (NASDAQ:CSCO) has taken a step back in recent sessions. Prior to that, however, the shares had posted some impressive gains, and as recently as Sept. 2, hit an eight-year high of $31.95. As it is, the tech stock still sports a year-to-date lead of roughly 11%.

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.

 

Target Effortless Triple-Digit Gains Every Sunday Evening For Life!

This is your chance to triple your profit potential on Sunday evenings, without spending all your free time watching the market.

On Sundays, as a Weekend Plus subscriber, you’ll get up to 6 trades every Sunday, each targeting gains of 200% or more.

Start targeting gains like the ones our subscribers have seen recently, including:

213.3% GAIN on AutoNation calls
100.0% GAIN on Monster Beverage calls
100.4% GAIN on Walgreens Boots Alliance puts
100.4% GAIN on ON Semiconductor calls
257.7% GAIN on Dell calls

101.0% GAIN on Apollo Global Management calls
103.6% GAIN on JP Morgan  Chase calls
105.3% GAIN on DraftKings calls
101.3% GAIN on Airbnb calls
203.0% GAIN on Shopify calls
102.0% GAIN on Cboe Global Markets calls
100.9% GAIN on Boeing calls
102.1% GAIN on Microsoft puts
102.3% GAIN on First Solar calls
101.5% GAIN on PulteGroup calls
101.0% GAIN on Apple calls
209.4% GAIN on NXP Semiconductors calls
100.8% GAIN on Uber Technologies calls
100.4% GAIN on Academy Sports and Outdoors puts
102.2% GAIN on Trade Desk calls
100.8% GAIN on DoorDash calls
100.0% GAIN on Camping World Holdings puts
100.0% GAIN on Cboe Global Markets calls
100.2% GAIN on C3.ai calls
238.5% GAIN on Oracle calls

 
 
 


 
 

Rainmaker Ads CGI