The tech stock was downgraded on FAANG concerns
Oracle Corporation (NYSE:ORCL) is sitting out the day's broader rally in tech stocks, thanks to a pair of bearish brokerage notes. For starters, J.P. Morgan Securities downgraded the stock to "neutral" from "overweight," and lowered its price target to $53 from $55, saying the software company is losing market share in the cloud space to larger firms like Amazon (AMZN) and Microsoft (MSFT).
Likewise, Nomura cut its price target on ORCL to $60 from $64, and lowered its fiscal 2019 revenue forecast, citing a more modest pace in growth. Oracle is due to release its fiscal fourth-quarter earnings report after the market closes next Tuesday, June. 19.
At last check, ORCL stock has plunged 4.5% to trade at $46.10. The shares have now shed 14% since their mid-March record high of $53.48 -- and are pacing for their lowest close since May 9.

Against this backdrop, ORCL options volume is soaring today, with around 54,000 calls and 47,000 puts on the tape -- five times what's typically seen at this point in the day. The top strike is the weekly 6/22 42.50-strike put, and it looks like traders may be selling to open these out-of-the-money options. If this is the case, they're either setting a short-term floor for Oracle, or hoping to capitalize on a post-earnings volatility crush.
Elsewhere, buy-to-open activity has been detected at the July 49 call. Based on the option's volume-weighted average price of $0.09, breakeven for the calls buyers at the close on Friday, July 20, is $49.09 (strike plus premium paid).
With earnings on the horizon, it's getting pricey to purchase premium on the tech stock. In fact, Oracle's 30-day at-the-money implied volatility of 26.8% ranks in the 90th annual percentile, meaning elevated volatility expectations are being priced into short-term options.
Plus, the security's 30-day implied volatility skew of 15.7% ranks higher than 94% of all comparable readings taken in the past year. This indicates puts are commanding a higher volatility premium than calls at the moment.