By David Russell
Atheros Communications (ATHR) has been falling since April, and now traders are betting against a significant turnaround.
optionMONSTER's tracking systems detected heavy call selling in the wireless-communications stock after it attempted to rally and then got pushed back into the red. The activity was scattered across the August 29, July 29, August 30, and August 31 strikes, which each changed hands more than 1,000 times.
ATHR is off a penny to $29.86 this afternoon. The stock gapped to an all-time high after issuing strong profit and bullish guidance on April 19 but then rolled over and proceeded to lose 26 percent of its value.
Today's traders wrote about 1,900 August 29 calls, mostly for $2.45, while the July 29s fetched about $1.60. Volume was more than five times open interest in both strikes.
The August 30 calls were sold for $1.95 to $2.30, while the August 31s brought in $1.50 to $1.70.
The trades reflect a belief that ATHR has only limited upside from current levels. They could have been implemented by a shareholder looking to unload the stock into strength or by a trader looking simply to earn income from the stock remaining little changed or falling through expiration.
The transactions also appeared after the shares ran into resistance at their 200-day moving average earlier in the month (purple line), which some chart watchers may consider evidence a significant rebound is unlikely.
Overall options volume in ATHR is eight times greater than average so far today, dominated by call selling.
(Chart courtesy of tradeMONSTER)