Traders are treating this legacy tech giant like the next 'meme' stock

• The 100-strike call option expiring May 15 was the most popular contract by volume, with most trading concentrated in at-or-near-the-money calls
• Cisco's implied volatility hit 47 on Friday, matching levels seen in the semiconductor index where stocks have made parabolic moves
• Rising call premiums alongside stock prices mirror patterns seen in Intel, which surged 88% after similar bullish options flows were identified before earnings

Summary

Cisco Systems is experiencing a surge in options trading activity ahead of its Wednesday earnings report, with patterns resembling "meme stock" behavior typically associated with retail trader momentum plays.

Key Trading Activity

Options volume in Cisco exceeded 400,000 contracts on Friday, driven primarily by at-or-near-the-money call options. The most popular contracts were the $100-strike and $95-strike calls expiring May 15. The stock is currently trading at approximately $96.92, up 0.37%.

Market Dynamics

Implied volatility—a key measure of options pricing—reached 47 on Friday, the highest level in over a year. This volatility matches levels seen in the semiconductor index, a sector known for parabolic price movements. The combination of rising call premiums alongside increasing stock prices is a hallmark characteristic of momentum stocks attracting retail trader interest.

Company Context

Cisco, a legacy networking giant, has undergone a multi-year transformation pivoting toward software and cloud-based AI technology. This repositioning appears to be generating renewed investor interest in the traditionally stable tech company.

Precedent

The article cites a recent similar example: an unnamed legacy chipmaker rebounded from irrelevancy concerns to gain 88% following identification of bullish options flows prior to earnings.

Implications

The unusual trading pattern suggests retail traders are placing significant bets on continued upward momentum through Cisco's earnings announcement, potentially amplifying volatility and price swings regardless of fundamental results.