) share market has recently been hit with unusual bullish activity.
Call volume is performing 17% stronger than usual, and has more
than doubled total put volume today for a grand total of 33,000
calls and 12,000 puts. Qualcomm is up $.79 to $66.43 and it's most
recent quarter showed a 24% increase in revenue to $6.1 billion.
CEO Paul Jacobs says he expects these figures to steadily increase
as the use of smartphones in the developing world continues to
grow: "The emerging markets are clearly going to be a big growth
story. But the developed markets continue to be strong. It's kind
of split 50/50."
Speculators seem to agree with Jacobs since the market has been
flooded with bullish activity. The most active strike has been the
July 70 call, where 11,000 contracts have traded. The overall
volume-weighted average price was $0.50, which was also the ask
price per contract. QCOM's annual high is $68.50 and it is
currently trading at $66.43, yet buyers are betting on it going
over $70.50. Out of 28 firms that are following the stock, 23 firms
have named it a "strong buy." Shareholders' confidence is well
placed as Qualcomm continues to outperform its competitors and may
dominate the LTE market for years to come.
Qualcomm knows how to spread the wealth and reward shareholders.
Last month, the board replaced its $4 billion share repurchase
authorization with a $5 billion repurchase agreement with no
expiration date. Qualcomm will also realize a 21.5% annualized
increased in its dividends by 2014. The new yield of 2.2% makes
Qualcomm one of the most generous dividend payers in the tech
Buy the July QCOM 67.5 calls for about $1.28
$128 per 1 lot
Greeks of the Trade: