Qualcomm Drops Like a Rock

Qualcomm (NASDAQ: QCOM) reported earnings after the bell yesterday that beat the street on EPS by a whopping $0.09; the revenue number was a little lighter than expected, but that seems to be the theme again this earnings season. It was two other things that severely rocked the street, however. The first was the lowering of the fiscal year 2010 guidance and the second was finding out that Qualcomm would not be the provider of chip to the new iPad.

This is sending Qualcomm down over 12.50% this morning and sparking lots of call selling. The Feb $45 calls are being sold heavily as well as the Jan 2011 $45 calls. Puts are in play across the board, especially the $40 and $35 puts in March. I think Qualcomm under $40 looks attractive, however.

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