Wednesday November 8, 1:22 pm Eastern Time
U.S. Options-PMC-Sierra calls busy, vols stay high
CHICAGO, Nov 8 (Reuters) - Calls were active and implied volatility stayed strong in options of communications chip maker PMC-Sierra Inc. (NasdaqNM:PMCS - news) as the stock fell for a second day in the wake of news from its client Cisco Systems Inc. (NasdaqNM:CSCO - news) that it was looking to reduce inventory next year.
Cisco, the world's No. 1 maker of Internet network gear, said on Tuesday that inventory levels jumped 59 percent to nearly $2 billion during its fiscal first quarter ended Oct. 28.
Near midday, shares of Campbell, California-based PMC-Sierra dropped $7-3/16 to $120-11/16 on Nasdaq volume of about 8.0 million shares from Tuesday's close of $127-14/16.
Implied volatility for the November 120 calls stood at 112 percent and for the December 120 calls at 107 percent, down about 5 percentage points from Tuesday, an options trader at the Chicago Board Options Exchange said.
``The stock has come down from certain levels and people think it's a good buy right now,'' the trader said.
He noted some two-way paper with the majority being call selling in the front month of November.
Another options trader on the Pacific Exchange also cited scattered call activity, where a bulk of the options turnover is listed.
About 7,597 calls and 2,518 puts changed hands early Wednesday across the four U.S. options exchanges, versus 33,217 contracts traded on Tuesday, according to Track Data. |
