Options Bears Pile on Sinking Symantec Stock

SYMC put options are seeing heavy trading today

Earlier this month, Symantec Corporation (NASDAQ:SYMC) stock was buzzing amid rumors of a potential buyout from semiconductor concern Broadcom (AVGO). Those talks have apparently fizzled today, with CNBC reporting negotiations hitting a snag over Symantec's share price of $28. In response, SYMC is down 15.5% to trade at $21.67, on track for its worst day since May 2018, and options bears are piling on.

More specifically, Symantec has seen 45,000 put options change hands today -- 16 times what's typically seen at this point, and volume already at a new annual high. The August 22 leads the way, but there are also new positions being opened at the July 22 and August 21 puts. Buyers of these front-month puts expect SYMC to remain nestled below the $21 or $22 level for the foreseeable future.

Regardless of motive, near-term options areattractively pricedright now. The security's Schaeffer's Volatility Index (SVI) of 36% sits in just the 11th percentile of its annual range. This means short-term options are pricing in relatively low volatility expectations for SYMC.

Symantec stock gapped higher when news of the buyout first broke, culminating in an annual high of $26.07 on July 8. Thanks to today's drop though, that bull gap has been filled, while the shares' 12-month breakeven point has also been breached. A pullback might have been inevitable for SYMC, regardless, especially considering the equity's 14-day Relative Strength Index (RSI) of 79-- deep in "overbought" territory.