Houghton and Atkeson

   

Zebra Technologies (ZBRA) makes bar code devices used in a wide array of businesses and government entities for keeping track of inventory. In some sense, ZBRA is a broader measure of the overall economic well-being of manufacturing in America.

Option investors believe manufacturing is not well.

Today, option investors have purchased more than 2,000 ZBRA Oct 25 Puts (ZBQVE).

Although the company is not scheduled to report earnings until after options expiration, there is some chance weak earnings from competitors or key customers could cause further weakness in the stock. When the company last reported earnings, it missed both the top and bottom lines and guided lower than consensus estimates.

The volatility on these options is currently below the implied volatility priced into the S&P 500 (SPX). This is quiet unusual. Typically, the volatility of a single stock is substantially higher than a portfolio of 500 stocks. Diversification helps reduce volatility.

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