Unusual Options Activity: Palo Alto Networks (PANW)

Cybersecurity

Shares of cybersecurity company
Palo Alto Networks (PANW) are down about 9 percent over the past year following a strong rally in the past few weeks. One trader sees further downside for shares ahead.

  • Special: 32,481% Growth: The SmartPhone Startup Outpacing Apple and Samsung
  • That’s based on the January 2025 $135 puts. With 708 days until expiration, 10,502 contracts traded compared to a prior open interest of 322, for a 33-fold rise in volume on the trade. The buyer of the puts paid $15.10 to make the bearish bet.

    Palo Alto shares recently traded for about $165, so the stock would need to drop about $30, or about 20 percent, for the option to move in-the-money. With a 52-week low of about $132, such a move in the next two years looks possible.

    • Bill O'Reilly Interviews Wall Street Expert to Help YOU Achieve the American Dream

      "We're going to bring back the American Dream... bigger, better, bolder, richer, safer, and stronger than ever before." - President Donald Trump

      During Trump's first term, 8 million Americans became millionaires despite constant resistance from Democrats and even some Republicans in his cabinet.

      Now, with Republicans controlling both houses and the Fed cutting rates, everything is aligned for even greater growth.

      Bill O'Reilly interviews investment expert Alexander Green who reveals details on 6 stocks with the potential to soar under Trump's pro-business policies.

      Get the Details Right Here

    While the company has seen revenues rise 25 percent to nearly $6 billion over the last year, the firm is not yet profitable, with an estimated value of 49 times forward earnings.
    Action to take: Shares have had a strong rally in the past few weeks, but could be prone to a pullback as tech stocks tend to get hit hard on market drops. Investors interested in the stock should wait for a re-test of the prior low before buying in.

    For traders, the puts are well priced, especially as they have nearly two years to play out. Traders can likely leverage a downturn into mid-double-digit gains.

  • Special: The Crypto that Could Replace Visa?
  •  
    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.