Protective play in Texas Instruments
Mike Yamamoto | [email protected]
optionMONSTER's Depth Charge system identified heavy buying in the November 40 puts, where more than 6,200 contracts traded from $1.09 to $1.14 yesterday afternoon. The volume--which included a print of 4,500--was well above the strike's previous open interest of 2,321 contracts, indicating new activity.
These puts could be making an outright bearish bet that TXN will drop, but they are more likely buying protection on a long position given how far the stock has climbed. Either way the contracts will expire worthless if shares remain above $40 through mid-November. (See our Education section)
TXN fell 0.74 percent yesterday to close at $40.25. The chip maker drifted lower after peaking at $40.94 on Sept. 19, its highest price since May 2001, but has been recovering in recent days.
Barclays raised its price target for TXN to $38 from $31 yesterday while maintaining an "equal rate" rating on the stock. Susquehanna also upgraded the name yesterday, to "neutral" from "negative," with a $42 price target. Texas Instruments is scheduled to release third-quarter results this coming Monday after the close.
Total option volume in the name exceeded 10,500 contracts yesterday, more than triple its daily average for the last month. Overall puts eclipsed calls by more than 3 to 1.