Hewlett-Packard's sales outlook for the year may be gloomy, but the options market is saying the 10% slump in its shares Wednesday may be unwarranted.(Track HP here)
By early afternoon Wednesday, call volume in HP was nearly 105,000, versus put turnover of 81,463. That's well above the average call volume of 18,900 and put volume of 13,100.
"A big bulk of it was in March 44 calls," said Michael Schwartz, Oppenhiemer's Chief Options Strategist. "They're probably playing for a bounce, as the market tends to overdo things," he noted.
HP's stock has made a long, steady 25% climb since August. But Wednesday's newsthe computer giant slashed revenue forecasts swallowed a good part of those gains. Executives blamed weakness in the P.C. and tech services businesses. The miss is seen as a mark against CEO Leo Apotheker, who wrapped up his first full quarter at HP issuing lower guidance —something the company has rarely done in recent years.