Qualcomm Inc (QCOM)

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Unusual Call Activity on Qualcomm Before Earnings
By: Schaeffer's Investment Research | April 30, 2019

Volatility expectations are high ahead of QCOM earnings

Qualcomm, Inc. (NASDAQ:QCOM) continues to trade near multi-year highs after being released from the grip of its long-time court battle with Apple (AAPL). QCOM stock was last seen trading at $87.06 with earnings due out after the close tomorrow, Wednesday, May 1, and there's notable call activity taking place in the options pits. Calls are outpacing puts by a more than 3-to-1 ratio, and there appears to be bullish spread action involving the May 90 and 95 calls. In short, it's likely traders are using the short-term contracts to bet on the shares rallying up to $95.

Looking more broadly, the options market is pricing in quite a volatile move for Qualcomm after earnings, relative to what we've seen from the security in recent years. Specifically, traders are expecting an 8.1% swing for Thursday's trading, which is more than double the average post-earnings move of 3.5% from the past two years. Meanwhile, we've already pointed out that QCOM tends to underperform drastically in May.

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