HPQ ? Hewlett-Packard Co. ? Shares in HPQ fell to their lowest level in a decade on Tuesday after the company announced fourth-quarter results that missed analyst expectations for sales and included an $8.8 billion impairment charge related to its Autonomy business. Options on the PC maker are seeing heavy volume amid an ugly selloff in the price of the underlying, currently trading down 11% at $11.84 as of 12:35 p.m. ET.
Nearly 250,000 call and put options have changed hands on the stock versus the average daily options volume of 47,726 contracts. Calls are slightly more active than puts, with the call-to-put ratio hovering around 1.1 in early-afternoon trading.
Weekly calls, specifically the Nov. 23 ?12 $12 strike contracts, attracted particularly heavy trading traffic today. It looks like some strategists are betting the stock could rebound somewhat off its post-earnings report lows by the end of the week.
Upwards of 23,000 of the $12 strike weekly calls traded in the first half of the session today against open interest of just 696 contracts. It appears most of these contracts were purchased for an average premium of $0.10 apiece, and may mean some options market participants are placing cheap near-term bullish bets on the computer maker.
Traders long the weekly contracts make money as long as shares in HPQ increase 2.2% over the current price of $11.84 to settle above the average breakeven price of $12.10 at expiration.??
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