Qualcomm Inc (QCOM)

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Options Bulls Circle Qualcomm Stock After Earnings Blowout
By: Schaeffer's Investment Research | July 30, 2020

• Qualcomm reported better-than-expected earnings
• No fewer than 12 analysts raised their price targets

The shares of Qualcomm, Inc. (NASDAQ:QCOM) are up 10.6% at $102.90 at last check, following the company's fiscal third-quarter report, detailing lower-than-expected revenue but earnings that beat estimates. To follow, no fewer than 12 analysts hiked up their price targets -- the highest from Canaccord Genuity to $137 from $115.

Today's pop has QCOM gapping to a new record high of $103.98, soaring above January 17th's all-time high of $96.17. In the past three months, the equity is up 30.8%, now eyeing its fourth-straight monthly win.

On the analyst front, 14 out of 19 in coverage sport a "buy" or better, with three at a "hold" and two at a "strong sell." Meanwhile, the 12-month consensus target price of $106.37, marks a 3% premium to current levels.

The options pits have been looking notably bullish, per QCOM's 10-day call/put volume ratio of 5.31 at the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX). This ratio stands higher than all but 5% of readings from the past year, meaning traders have rarely been more call-heavy.

Today, options volume is exploding. So far, 146,000 calls and 42,000 puts have crossed the tape already, 15 times the expected daily volume. Most popular are the weekly 7/31 100- and 105-strike calls, meaning traders are betting on continued upside by tomorrow's expiration.

Lastly, now looks like an attractive time for traders to jump aboard Qualcomm stock with options. This is per the stock's Schaeffer's Volatility Index (SVI) of 41%, which stands higher than 20% of all other readings in its annual range. This implies that options players are pricing in relatively low volatility expectations at the moment.

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