Why Aren’t We Seeing More Puts Trade In QCOM?
As the Nasdaq hammers to a fresh
26-month low, traders aren’t seeing panic here on the trading floors as much
as a complete lack of interest. I’m not saying there isn’t any trading
going on, but clearly institutional paper isn’t much interested in stepping
in front of the train anymore. They say the trend is your friend and while the
trend is friendly in terms of pointing us in the direction the market is
heading, it certainly isn’t friendly to any bulls, if there are any left.
   Â
If you count yourself among the few bulls left in today’s market, you
probably took some comfort from yesterday’s closing action and Wall
Street’s reaction to yesterday’s disaster d’ jour Brocade
Communications Systems
(
BRCD |
Quote |
Chart |
News |
PowerRating) and today’s offering: Sun
Microsystems
(
SUNW |
Quote |
Chart |
News |
PowerRating). We tracked some outstanding bullish
action in SUNW call options this morning, as institutions seemed to want to
accumulate March 20 & 22 calls.Â
    Â
Action in JDS Unipahse
(
JDSU |
Quote |
Chart |
News |
PowerRating), EMC
(
EMC |
Quote |
Chart |
News |
PowerRating),
IBM
(
IBM |
Quote |
Chart |
News |
PowerRating) and AOL
(
AOL |
Quote |
Chart |
News |
PowerRating) options has been heavy on the bearish side,
with anywhere from 3:1, to 6:1 dollar-weighted money flowing into put options
versus calls.Â
   Â
Bearish $W Put / Call Ratios:
Â
|
 Call
|
 Put
|
 $W
|
 $W
|
Symbol
|
Volume
|
Volume
|
Call
|
Put
|
JDSU
|
     Â
|
     Â
|
     Â
|
   Â
|
EMC
|
     Â
|
     Â
|
     Â
|
   Â
|
IBM
|
   Â
|
     Â
|
     Â
|
   Â
|
AOL
|
     Â
|
     Â
|
     Â
|
   Â
|
(1010WallStreet.com
has licensed the use of Hamzei Analytics LLC proprietary options analytics)
If you are looking for
likely turnaround scenarios, you may want to take a look at Microsoft
(
MSFT |
Quote |
Chart |
News |
PowerRating), Qualcomm
(
QCOM |
Quote |
Chart |
News |
PowerRating) and to a
lesser extent, Merck & Co. Inc.
(
MRK |
Quote |
Chart |
News |
PowerRating).
MSFT is up 1/2 (as of 12:45 pm) and QCOM, down 14 1/2, but 2 1/2 off its lows.
These ratios tell us that either the institutions are tired of selling in
these two issues, or that given their relationship to the rest of the market,
they are fairly priced. Especially in the case of QCOM, it is rare to see a
balanced dollar-weighted put/call ratio on such a down day. If you were
looking to catch a falling knife, at least the numbers are telling us that
this might be the one.Â
   Â
Bullish $W Call/Put Ratios:Â
Â
|
 Call
|
 Put
|
 $W
|
 $W
|
Symbol
|
Volume
|
Volume
|
Call
|
Put
|
MSFT
|
     Â
|
     Â
|
     Â
|
     Â
|
QCOM
|
     Â
|
     Â
|
   Â
|
   Â
|
MRK
|
       Â
|
       Â
|
     Â
|
       Â
|
(1010WallStreet.com
has licensed the use of Hamzei Analytics LLC proprietary options analytics)