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Big Print In Qualcomm Options Ahead Of Earnings After The Close

Today’s tickers: QCOM, OI & FB

QCOM - Qualcomm, Inc. – Shares in mobile chipmaker, Qualcomm, are off 1.7% today at $61.80 as of 11:00 a.m. ET ahead of the company’s third-quarter earnings report this afternoon. A large trade in out of the money call options on the stock this morning suggests one strategist is positioning for the price of the underlying to take off during the next couple of months. The single largest print in QCOM options thus far in the session was a block of 43,000 Sep $67.5 strike calls purchased for a premium of $0.43 per contract. The trade makes money at expiration should shares in Qualcomm rally 10% to top the effective breakeven point at $67.93. Shares in QCOM last traded above $67.93 back in March. The Sep $70 strike calls are also changing hands today, with around 900 lots purchased during morning trading for an average premium of $0.16 apiece.

OI - Owens-Illinois, Inc. – Shares in the maker of glass containers rallied near the open on Wednesday, but have since pared gains to trade are down roughly 0.60% on the session at $29.43 as of 12:50 p.m. ET. Options changing hands on Owens-Illinois in the early going suggest at least one trader is positioning for the price of the underlying to rally to fresh 52-week highs during the next couple of months. The company reports second-quarter earnings after the close of trading today. The most active contracts traded on OI as measured by volume today are the Sep $29 strike calls, with around 2,000 lots traded versus open interest of just one contract. Time and sales data suggests most of the calls were purchased for an average premium of $1.85 each. The bullish trade on OI may be profitable at expiration in September in the event that shares rally 4.8% over the current price to exceed the average breakeven point at $30.85. The stock last traded above $30.85 back in June of 2011.

FB - Facebook, Inc. – Options volume on Facebook is marching higher today ahead of the social network operator’s second-quarter earnings report after the close this afternoon. Overall volume is approaching 140,000 contracts as of 1:00 p.m. ET versus the stock’s average daily volume of around 173,000 contracts. Shares in the name are up on the session, trading 0.65% higher at $26.30 as of the time of this writing. Trading traffic in FB calls is outpacing that of puts, with the call/put ratio hovering around 2.2 this afternoon. Volume heaviest in short-dated options that expire at the end of this week, though substantial volume is also changing hands across expiries today.

 

Caitlin Duffy
Equity Options Analyst


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