Zebra Technologies (ZBRA) Getting Bit?

by Houghton and Atkeson   10/03/08
Email This   Print Page  Tweet This Tweet This

Zebra Technologies (ZBRA) makes bar code devices used in a wide array of businesses and government entities for keeping track of inventory. In some sense, ZBRA is a broader measure of the overall economic well-being of manufacturing in America.

More Trader Alerts

Option investors believe manufacturing is not well.

Today, option investors have purchased more than 2,000 ZBRA Oct 25 Puts (ZBQVE).

Although the company is not scheduled to report earnings until after options expiration, there is some chance weak earnings from competitors or key customers could cause further weakness in the stock. When the company last reported earnings, it missed both the top and bottom lines and guided lower than consensus estimates.

The volatility on these options is currently below the implied volatility priced into the S&P 500 (SPX). This is quiet unusual. Typically, the volatility of a single stock is substantially higher than a portfolio of 500 stocks. Diversification helps reduce volatility.


Related Story -- "Investors Say They Like to 'Talk to Chuck'"

More By This Expert

What's Ahead for the Markets

Looking into June, the market should begin refocusing on upcoming earnings reports for evidence the economy is gaining momentum.

Watching the Treasury's Actions

In the short-term, the government's bond auction is likely to be a key driver of stocks.

Treasury Auction Boosts Market

The Treasury's auction of two-year notes brought an upside surprise which should alleviate fears of a lack of demand for U.S. paper.

Credit Markets Point to Upturn

The credit market, a reliable indicator of equity direction, suggests we will break out of the SPX's trading range to the upside.

Market Cooling Down

The market seems to be saying that a 30% move up from the lows is ahead of the real economy and the market needs to allow the economy to catch up.

Options Broker Center

Compare Brokers