Options Trading News

June 19, 2012  Tue 9:30 AM CT

The bears want to pounce on Skyworks Solutions as the chip maker struggles with a resistance level from earlier in the year.

optionMONSTER's Depth Charge monitoring system detected the purchase of about 2,500 August 29 puts for $2.85. Volume is more than 7 times open interest in the strike.

SWKS is up 0.71 percent to $28.46, back around the same price area where it peaked in March. Today's put buyer apparently thinks that sellers will come forward at this level once again and drive the stock lower.

The trader is using in-the-money contracts, which will closely track declines in the share price. They're more expensive than out-of-the money options and reflect a stronger bearish conviction. (See our Education section)

The company's results have beaten expectations for at least the last four quarters. The date of the next report for its fiscal third quarter hasn't been announced, but last year it was on July 21.

Overall option volume in SWKS is almost twice the average amount so far today, with puts outnumbering calls by more than 3 to 1.
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As I stated in last week's article, a break out or a break down needs to have a couple things happen before it is considered a confirmed break out or break down. The only problem is that in today's market where things move much more quicker than they did just a few years ago, two days could wind up being the majority of the expected movement, if not the whole movement.

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