Unusual Options Activity: Corning Incorporated (GLW)

Shares of display technology Corning International (GLW) are down slightly over the past year. One trader sees a rebound ahead in the coming months.

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  • That’s based on the May $42 calls. With 70 days until expiration, 18,242 contracts traded compared to a prior open interest of 585, for a 31-fold jump in volume. The buyer of the calls paid $0.87 to make the trade.

    Shares last traded around $37, so they would need to rise $5, or about 13.5 percent, for the option to move in-the-money. Corning stock has traded as high as $47 in the past year, so this strike price is about halfway between the current price and the prior high for shares.

    The maker of high-tech display devices had a reasonable year operationally. Earnings grew by 93 percent, and overall revenue rose by nearly 10 percent. And profit margins hit 13.5 percent. Shares now trade at 17 times forward earnings, a steep discount to the overall stock market right now.

    Action to take: The stock pays a dividend of about 2.8 percent here, with room for further increases over time. That could also help support the share price in the long-term.

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  • For traders, the May calls look attractive for a move higher in shares in the next two months. They’re also priced cheaply enough that traders could even nab a triple-digit return from the options if they rally enough before expiration.

     

    Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.

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