Options Traders Target Xperi Stock After Samsung Settlement

XPER also upped its current-quarter and full-year guidance

Patrick Martin
Dec 10, 2018 at 2:14 PM
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The shares of Xperi Corp (NASDAQ:XPER) are up a whopping 45.5% to trade at $18.63, leaping higher after settling all legal matters with Samsung Electronics over a new patent license agreement. In addition, the tech company also raised its fourth-quarter and fiscal year outlook. Two brokerage firms have issued price-target hikes in response, including to $35 from $25 at Benchmark. What's more, options traders have entered the fray at an alarming rate.

At last check, 1,317 options have changed hands, 28 times what's typically seen at this point in the day, with volume nearing an annual high. Leading the charge is the December 17 put, followed by the December 18 call, and new positions are being opened at each contract. The January 2019 21-strike call is also seeing new positions being opened today.

This is shaping up to be the security's best day ever by a long shot, and helps break the stock out of long-standing downtrend that culminated in a seven-year low of $12.08 on Oct. 26. The shares are now on track to close above their 200-day moving average for the first time since March 2017. Nevertheless, XPER still is down nearly 23% year-to-date.

Daily Stock Chart XPER

Short sellers have been in covering mode even before today's rally, and a short squeeze could definitely keep the wind at XPER's back. Short interest fell by 8% in the most recent reporting period to 4.40 million shares, the lowest since May 1. This still represents a healthy 9.3% of the stock's total available float, and 12.2 times the average daily trading volume. 

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