NetLogic (NETL, news, chart, volatility), one of the most heavily shorted names listed on the NASDAQ (58 percent as percent of float), is seeing double its normal trading volume. 6,700 NETL puts and 1,800 calls have traded on the Mountview, California based chipmaker. Shares are not keeping pace with the sector. While the PHLX Semiconductor Index (.SOX) is up 6.17 to 333,87, NETL is down 40 cents to $34.00. In the options market, the day’s top two trades include 2,500 of the October 35 puts traded offerside for $2.90 and 2,500 October 30 puts traded bidside for 90 cents a contract. The action appears to be part of a bearish put spread, where the strategist bought the 35s and sold the 30s. If so, $2.00 was paid and the payoff potential is $3.00 if NETL falls to $30 or less by October options expiration (27 days).
About the Author (Author Profile)
Frederic Ruffy is a well-known trader, writer, and strategist who has spent years educating investors and creating intelligent, insightful, unbiased market observations that are frequently cited by the Wall Street Journal and other financial publications. As senior analyst, Fred provides frequent and regular notes and daily updates for activity of interest.