OptionsHouse

Options Trading News

October 16, 2013  Wed 3:47 AM CT

TXN: SEE CHART GET CHAIN FIND STRATEGIES
Traders are positioning for a possible pullback in Texas Instruments, which reports earnings next week.

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.
Share this article with your friends


Related Stories

TXN

Bullish play in Texas Instruments

August 25, 2015

The chip manufacturer has suffered with the rest of the semiconductor industry and is down 16 percent so far this year.

Invest Like a Monster - San Antonio: October 9-10

Premium Services

Archived Webinar

Education & Strategy

Options Academy: Ron's Risk Calculation--A Real Life Example

It is rare that I get a chance to give a real-life, real-time example in my articles that the readers were not only following but were actually involved in at the time the event is happening. Well, that is where we are right now in our QQQ trade from last week. Let's recap the trade itself.

View more education articles »