By Chris McKhann
The price of Jabil Circuit (JBL) stock has risen 400 percent over the last year, but the options volume this morning appears to be calling a top.
JBL, a provider of electronic manufacturing services, trades at $18.30, up 3 percent on the day. Earlier it hit $18.42, an 18-month high. But this area represents resistance for the stock going all the way back to 2007.
The average option volume in JBL has been less than 2,000 contracts over the last month, but this morning more than 5 times that trades, almost all of it in one strike. Our systems show that 8,800 of the May 20 calls have changed hands against open interest of just 22 contracts.
Most of this action is call selling, with the largest block of 6,069 sold for $0.51. While this call selling isn’t clearly tied to any other trades, it could be done against an existing long stock position in a covered call position. If that is the case, this is actually a mildly bullish trade, with the maximum gain coming if JBL is at or above $20 at that expiration.
Disclosure: No positionws