National Semiconductor Corp. (NSM) Options Activity

National Semiconductor rallied 4.5% on Friday but underneath the decent stock performance remains weak fundamentals and strong Put Option buying in a number of months going forward. Not a whole lot of news no the day but the overall market was rallying and some beaten down stocks moved higher on hopes that the economy will begin to recover.

By Steve Patterson

Fundamentals for National Semiconductor

The fundamentals for NSM don't look good. The company reports their current quarter on March 12 and analysts have been downgrading their expectations dramatically. Sales are expected to slip 35% while earnings come in near a 5 cent loss. This is compared to a 30 cent gain seen by analysts 90 days ago. A 117% drop in earnings compared to last year's same quarter.

Put Option Action

What stood out at first to me was the heavy Put Option buying on NSM. February saw 1,000 puts being traded at the $12.50 strike price. The Call volume for the month is close to 150 contracts. Future months saw similar if not better Put buying on the stock. In March there were 2,011 Put contracts traded at the $10 strike price. In May there were 5,024 Put contracts traded at the $12.50 strike price and 1,941 Put contracted traded at the $10 strike price. Call volume in May was again the limited 150 contracts.