Cirrus Logic Puts Popular After Apple Blow

Barclays noted that Cirrus Logic's dongle has been removed from iPhones

Managing Editor
Sep 13, 2018 at 2:58 PM
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Apple suppliers are getting a boost today, as Apple (AAPL) stock rebounds from yesterday's iPhone and Apple Watch reveal. One name, however, is bucking the bullish trend, with Cirrus Logic, Inc. (NASDAQ:CRUS) stock down 3.8% to trade at $39.46, at last check, after it was revealed the company's dongle was removed from iPhones. As such, CRUS options traders are piling on.

More specifically, Cirrus puts are flying off the shelves today. Roughly 3,400 puts have been traded -- eight times what's typically seen at this point in the day, and volume pacing for the 98th percentile of its annual range. Most active are the weekly 9/14 40-and 40.50-strike puts, where new positions are being opened. This indicates options traders are banking on an extended downturn from the Apple supplier through the end of this week.

This bearish bias has been a trend for the past two weeks, despite light absolute volume. At the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) the equity boasts a 10-day put/call volume ratio of 2.23, which ranks in the 95th percentile of its annual range, indicating not only that purchased puts more than doubled calls, but the high percentile rank shows the rate of put buying relative to call buying has been quicker than usual.

Echoing this put skew is the stock's Schaeffer's put/call open interest ratio (SOIR) of 0.71, which ranks in the 89th percentile of its annual range. This indicates that while open calls are still more prevalent than puts among options expiring within three months, near-term traders have rarely been more put-biased in the past year.

Cirrus Logic stock was initially higher this morning, but abruptly reversed course around 11:20 a.m. ET -- when the Barclays report about the aforementioned dongle came out -- and is now headed toward its worst day in over a month. The drop has the shares set to breach their 80-day moving average for the first time since June. Overall, CRUS has now given back 23% in 2018. 

Daily Stock Chart CRUS


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