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April 11, 2014  Fri 12:21 PM CT

FSL: SEE CHART GET CHAIN FIND STRATEGIES
Freescale Semiconductor is sitting at all-time highs, and someone is apparently afraid that it's going to roll over.

optionMONSTER's Depth Charge monitoring program has detected the purchase of about 7,600 May 24 puts, most of which priced for $1.30. Volume was more than 300 times previous open interest at the strike, which indicates that new positions were initiated.

Puts lock in the price where a stock can be sold, letting investors bet on a drop or hedge a long position. That way they can stay get short or stay long with limited risk. (See our Education section)

FSL is down 1.51 percent to $24.30 in afternoon trading but is up 52 percent so far this year. The chip maker exploded higher on a strong earnings report in late January and kept advancing until it hit $26 last week.

The stock made a lower high yesterday as the rest of the market came under heavy selling pressure, which could make some chart watchers fear that a bigger drop is coming next. The company's next earnings report is scheduled for April 24 after the closing bell.

Overall option volume is 14 times greater than average in FSL so far today, according to the Depth Charge, with puts accounting for a bearish 93 percent of the total.
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Education & Strategy

The Strike-Based Greeks

The other Greeks (Gamma, Vega, and Theta) are calculated by using month and strike data, and not by individual option. These are called strike-based Greeks. Gamma, Theta, and Vega are all strike-based Greeks

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