Cirrus Logic Puts Popular After Apple Blow

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

by Patrick Martin

Published on Sep 13, 2018 at 2:58 PM

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

Telecom Stock Sends Up Sell Signal
AT&T stock has been struggling throughout 2018
Lowe's Stock Could Build On Momentum Next Quarter
LOW nabbed a record high last Friday
History Says Bet on Campbell Soup Stock's Next Leg Lower
CPB has shed 17% this year
From Schaeffer's Pro Traders
Weekly Options Secrets Revealed

Direct from our Schaeffer's traders, your FREE guide to winning with weekly options!


Partnercenter


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


Could the State Department's Odd Trade Demand Cripple the Dollar?
Could the dollar be getting ready to plummet?
2 Drug Stocks Swinging Lower Today
One name jumped yesterday on a big regulatory win
Intel Stock Dips Again Following Latest Downgrade
Several analysts have lowered their outlooks on INTC stock
How Trump Could Shock Bitcoin Investors
$5.1 trillion could be unleashed into the crypto market as soon as September 30.