Business Magazine

Traders Snap Up Cirrus Logic Puts

Posted on the 20 April 2012 by Phil's Stock World @philstockworld

Today’s tickers: CRUS, VRA & CMG

CRUS - Cirrus Logic, Inc. – Traders accumulating put options on Cirrus Logic this week may be bracing for potential bearish movement in the price of the underlying ahead of Apple, Inc.’s second-quarter earnings report on Tuesday, and the Company’s own fourth-quarter release on Wednesday. Shares in audio chip maker Cirrus, which generates roughly 70% of its revenues from business with Apple, is down 3.3% today at $22.20. The stock rallied briefly at the open on a new ‘Buy’ rating and share price target of $40.00 by Sterne Agee this morning, but quickly turned-tail as the final trading day of the week progressed. Put open interest in the May expiry has increased over the past couple of days, with interest continuing to build in the contracts this morning. The May $21 strike put options are the most heavily traded by volume, with some 2,100 contracts in play as of 12:20 p.m. in New York. It looks like one or more traders purchased the majority of the $21 puts for an average premium of $0.82 apiece in the first half of the trading session. Yesterday, around 1,100 of these contracts were purchased for an average premium of $0.60 each. The intraday erosion in the share price has lifted premium on the puts substantially, with the last traded price of $1.15 up 90.0% overnight and roughly 40.0% since the bulk of the options were purchased this morning. Put buyers were also active in the May $22 strike contracts yesterday, snapping up some 1,240 positions, as well as the May $24 strike put options, purchased roughly 2,500 times on Thursday for an average premium of $1.83 each. The value of these bearish put options will continue to climb in the event that CRUS shares extend losses through May expiration.

VRA - Vera Bradley, Inc. – Shares in the maker of quilted handbags and accessories, down nearly 50.0% off the 2011 52-week high of $52.36, may continue to unravel this summer by the looks of bearish put buying in the August expiry today. The stock is down 1.5% this afternoon to stand at $27.20 as of 1:00 p.m. ET. Vera Bradley options are more active than usual, with the bulk of the volume changing hands just before midday. It looks like one trader eyeing fresh lows in the shares purchased 2,000 put options at the Aug. $22.5 strike for a premium of $1.25 apiece. The position may be profitable at expiration in August if shares in VRA slide more than 20.0% from the current price of $27.20 to settle below the effective breakeven point at $21.25. A roughly 22.0% correction in the shares to $21.25 during the next four months to expiration would drag the price of the shares to new record lows.

CMG - Chipotle Mexican Grill, Inc. – Shares in the provider of burrito bowls are selling off following the Company’s first-quarter earnings report, trading down 1.5% at $424.20 this afternoon, but options activity on the stock suggests at least one strategist is positioning for shares in Chipotle Mexican Grill to potentially hit a fresh record high in the next few weeks. Of note is bullish volume building in the May $455 strike call options. It looks like some 1,500 of the contracts were purchased this morning for an average premium of $4.27 apiece. Call buyers profit at expiration next month as long as shares in Chipotle surge 8.3% to surpass the average breakeven price of $459.27. The stock’s all-time high is the April 14th intraday peak at $442.40.


Caitlin Duffy
Equity Options Analyst

You Might Also Like :

Back to Featured Articles on Logo Paperblog

These articles might interest you :

  • How Candice Got Her Life Back

    Candice had always been fit and active. Then all of a sudden, she started gaining weight. After having two kids, she was at her all-time high and was always... Read more

    The 15 December 2018 by   Dietdoctor
  • FIDLAR at 102.1 The Edge – Sugar Beach Sessions

    FIDLAR 102.1 Edge Sugar Beach Sessions

    On a surprisingly warm December day, FIDLAR stopped by the 102.1 Edge studios for a Sugar Beach Session. FIDLAR is a four-piece punk rock band from Los... Read more

    The 15 December 2018 by   Phjoshua
  • The Mortal Engines Has a Stupid Premise. That Doesn’t Mean It’s a Stupid Movie.

    Mortal Engines Stupid Premise. That Doesn’t Mean It’s Movie.

    We keep saying we want Hollywood to get better and pull back on all the reboots, revival, sequels, and general retelling of old stories. Why not try to tell... Read more

    The 15 December 2018 by
  • Saturday 15th December: Annie Keene

    Saturday 15th December: Annie Keene

    Only ten days to Christmas and only nine Blogvents left and so let's crack on with our lady of the day and she will be a very familiar face to all Cameron... Read more

    The 15 December 2018 by   Kirsty Stonell Walker
  • “Will I Get Angry Easily If I Skip Carbs?”

    “Will Angry Easily Skip Carbs?”

    How many carbs should I aim for per day to remain weight stable? How can I stop myself from overeating? These and other questions are answered this week by... Read more

    The 15 December 2018 by   Dietdoctor
  • Franchise Weekend – The Nutty Professor (1996)

    Franchise Weekend Nutty Professor (1996)

    Director: Tom Shadyac Writer: David Sheffield, Barry W Blaustein, Tom Shadyac, Steve Oedekerk (Screenplay) Jerry Lewis, Bill Richmond (Original Screenplay)... Read more

    The 15 December 2018 by   Newguy
  • Vans RV-7

    Vans RV-7

    @ Chino Airport, CA May 2018 This RV-7 sits waiting for a pilot to hop in and take her up.  The Van’s RV-7 is a two-seat, single-engine, low-wing homebuilt... Read more

    The 15 December 2018 by   Htam

Paperblog Hot Topics