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Investors pile into long-dated deep out-of-the-money HPQ puts ahead of results
HP, Inc. is set to report fiscal Q3 after the close, while trading shows more than 3,000 put contracts at the $22 strike expiring in June 2027.
HP, Inc. (HPQ) is scheduled to announce its fiscal Q3 results after the market close Wednesday, and options activity suggests some investors are positioning for downside in advance. Yahoo Finance highlighted that investors have been buying long-dated, deep out-of-the-money put options with expirations more than nine months out.
In midday trading, HPQ was around $29.69, after trading near a recent peak of $31.30 on Aug. 13. According to the article, similar price behavior has appeared after prior earnings cycles, and some traders appear to be using lower strike puts to express concern about what comes after the next report.
The report points to heavy interest in low strike price contracts, including $28.00 strike puts expiring Oct. 16, and trading in puts at the $22.00 strike expiring June 17, 2027. It also noted the $22.00 strike volume is more than 29 times the prior number of puts outstanding for that strike and expiry.
The article links the positioning to worries about demand for HP products and cites expectations for weaker results later in the fiscal year. It also referenced analyst outlook from Yahoo Finance, including an average price target of $23.41 across 17 analysts, which is about 21.0% below the stock’s midday level.