Options Corner: Palo Alto Networks' Non-Negotiable Business Presents A Compelling Discount

Benzinga_recent_news05:34

Palo Alto Networks Inc (NASDAQ:PANW) couldn't escape from the fallout in the tech sector amid rising geopolitical tensions. Tensions in the Middle East appeared to influence investors as they shifted ...

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Tensions in the Middle East appeared to influence investors as they shifted ...</p>\n\n<a href=\"https://www.benzinga.com/markets/options/26/02/50356074/palo-alto-panw-stock-discount-contrarian-smart-money-options-trade\">Source Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","isBrief":false,"type":0,"news_type":1,"symbol":"LU2095319765.USD","symbol_name":"Natixis Thematics Subscription Economy R/A USD","start_time":0,"source_url":"https://www.benzinga.com/markets/options/26/02/50356074/palo-alto-panw-stock-discount-contrarian-smart-money-options-trade","article_id":"2608238341","we_media_id":null,"thumbnails":["https://cdn.benzinga.com/files/images/story/2026/02/03/Palo-Alto-Networks-Logo-And-Sign-At-Sili.jpeg?optimize=medium&dpr=2&auto=webp&width=240"],"rights":{"source":"benzinga_recent_news","url":"https://www.benzinga.com/markets/options/26/02/50356074/palo-alto-panw-stock-discount-contrarian-smart-money-options-trade","rn_cache_url":null,"directOrigin":true},"url":"https://stock-news.laohu8.com/highlight/detail?id=2608238341","pubTimestamp":1770154440,"columns":[],"sourceInfo":{"source_id":"benzinga_recent_news","name":"Benzinga"},"weMediaInfo":null,"summary":"While Palo Alto Networks fell amid the rotation away from tech, the smart money is driving optimism in the options market for PANW stock.","collect":0,"end_time":0,"defaultTopTitle":"benzinga.com","property":[],"viewcount":null,"language":"en","relate_stocks":{"LU2095319765.USD":"Natixis Thematics Subscription Economy R/A USD","BK4598":"佩洛西持仓","LU0348723411.USD":"ALLIANZ GLOBAL HI-TECH GROWTH \"A\" (USD) INC","LU1989764664.SGD":"CPR Invest - Global Disruptive Opportunities A2 Acc SGD-H","LU2023250504.SGD":"Allianz Thematica Cl AMg DIS H2-SGD","LU2210150020.SGD":"Natixis Thematics Subscription Economy R/A SGD","LU2023250843.SGD":"Allianz Thematica Cl AT Acc H2-SGD","LU1720051108.HKD":"ALLIANZ GLOBAL ARTIFICIAL INTELLIGENCE \"AT\" (HKD) ACC","IE00BMPRXR70.SGD":"Neuberger Berman 5G Connectivity A Acc SGD-H","LU1720051017.SGD":"Allianz Global Artificial Intelligence AT Acc H2-SGD","LU1917777945.USD":"安联专题基金Cl AT Acc","IE00BMPRXN33.USD":"NEUBERGER BERMAN 5G CONNECTIVITY \"A\" (USD) ACC","BK4097":"系统软件","LU1989764748.USD":"东方汇理环球颠覆性机遇A2 Acc","PANW":"Palo Alto Networks","LU2210149790.SGD":"Natixis Thematics Subscription Economy R/A SGD-H","LU0234570918.USD":"高盛全球核心股票组合Acc Close","LU1861215975.USD":"贝莱德新一代科技基金 A2","BK4532":"文艺复兴科技持仓","LU1804176565.USD":"EASTSPRING INV GLOBAL GROWTH EQUITY \"A\" (USD) ACC","LU1548497426.USD":"安联环球人工智能AT Acc","LU1169589451.USD":"ALLSPRING (LUX)  U.S. SELECT EQUITY \"A\" (USD) ACC","BK4560":"网络安全概念","LU2357305700.SGD":"Allianz Global Artificial Intelligence ET H2-SGD","BK4581":"高盛持仓","LU1861220033.SGD":"Blackrock Next Generation Technology A2 SGD-H","IE00B19Z8W00.USD":"FTGF CLEARBRIDGE US LARGE CAP GROWTH \"A\" INC","LU2286300806.USD":"Allianz Cyber Security AT Acc USD","BK4585":"ETF&股票定投概念","LU2106854487.HKD":"ALLIANZ THEMATICA \"AMG\" (HKD) INC","LU2125909759.SGD":"Natixis Thematics Safety H-R/A SGD","LU1623119135.USD":"Natixis Mirova Global Sustainable Equity R-NPF/A USD","LU0266013472.USD":"AXA WF - Framlington Longevity Economy A Cap USD","LU2125909916.SGD":"Natixis Thematics Safety R/A SGD","SG9999001424.SGD":"United E-Commerce Fund SGD","IE00B19Z8X17.USD":"FTGF CLEARBRIDGE US LARGE CAP GROWTH  \"AG\" (USD) ACC","LU2265009873.SGD":"Eastspring Investments - Global Growth Equity AS SGD-H","LU1712237335.SGD":"Natixis Mirova Global Sustainable Equity H-R-NPF/A SGD","LU1923622291.USD":"Natixis Thematics Safety R/A USD","LU1169590202.USD":"ALLSPRING (LUX)  U.S. SELECT EQUITY \"I\" (USD) ACC","LU1974910355.USD":"Allianz Thematica Cl AMg DIS USD","IE00B19Z9505.USD":"美盛-美国大盘成长股A Acc","BK4588":"碎股","BK4550":"红杉资本持仓","LU2355687059.USD":"NORDEA 1 GLOBAL IMPACT  \"BP\" (USD) ACC"},"translate_title":"期权角：Palo Alto Networks的不可协商业务提供了令人信服的折扣","themeId":null,"isJumpTheme":false,"ttsUrl":null,"symbols_score_info":{"PANW":1.5},"content_text":"Palo Alto Networks Inc (NASDAQ:PANW) couldn't escape from the fallout in the tech sector amid rising geopolitical tensions. Tensions in the Middle East appeared to influence investors as they shifted away from growth names and into safe havens like gold. Still, cybersecurity represents a non-negotiable element within the broader innovation ecosystem. As such, PANW stock would seem to be a discount — and that's exactly how the smart money is playing it.\nFor the March 20 expiration date, both call and put IV are nearly symmetric around the spot price, which indicates that the market is not paying an excess fear premium for immediate downside protection. That's significant because if downside represents the dominant theme, we will likely see put-side IV spike noticeably higher.\nBecause of the holistic positioning in the options market, we see a surface-level distortion that has caused both put and call IV to rise gradually at the edges. Generally, this setup indicates that while smart money traders recognize downside as a non-trivial risk, they're also pricing for upside convexity.\nIn other words, sophisticated traders don't appear to be panicking. They likely view PANW stock as a viable opportunity — they just want some insurance to go with the position. In effect, we have the highest-quality form of contrarianism: public money fear versus smart money optimism.\nWhile we may understand the general sentiment of options traders, we're still at a loss as to how this translates into the forward PANW stock price output. For that, we can turn to the Black-Scholes-derived expected move calculator. The financial model — which is Wall Street's standard mechanism for pricing options — reveals a parametric range of between $144.30 and $183.46 for the March 20 expiration date.\nWhere does this dispersion come from? Black-Scholes assumes a world where stock market returns are lognormally distributed. Under this framework, the above range represents where PANW stock may symmetrically land one standard deviation away from spot (while accounting for volatility and days to expiration).\nIf you want to skip all the math, it really means that in 68% of cases, PANW stock should trade between roughly $144 and $183 when March 20 rolls around. That's a great insight because it frames the parameters of the battlefield. However, it's also a bit like saying that our search zone is a large section of the Pacific Ocean as opposed to the Atlantic.\nLike a search-and-rescue team, we as debit-side traders have very limited resources. Frankly, not every shipwreck incident merits a full-scale effort. Because the search area is so vast — in this case over 27% ($183.46 divided by $144.30) — we need some way of probabilistically determining where the survivors are.\nThis is where the limitations of the Black-Scholes model become obvious. Because the model calculates its forward probabilities independent of context (such as ocean currents, to extend the analogy), we only have a perfectly symmetrical parameter relative to spot. Probabilistically, though, the shipwrecked survivors have likely drifted one way or another.\nWe need a model to accommodate this drift and that's where the Markov property comes into view.\nUnder Markov, the future state of a system depends entirely on the current state. In other words, forward probabilities should not be calculated independently but rather assessed under context. To use a simple sports analogy, a 20-yard field goal is an easy chip shot. Add snow, wind and playoff pressure and these odds may change quite dramatically.\nIn the case of PANW stock, the present context is that, in the last 10 weeks, the security printed only two up weeks, leading to an overall downward slope. There's nothing special per se about this 2-8-D sequence. However, this quantitative signal represents a specific type of ocean current — and that means this current will likely influence PANW in a way that's different from other currents.\nThink of it this way: a shipwrecked survivor will almost certainly drift differently in calm waters versus choppy waters. Therefore, the 2-8-D sequence represents a specific type of moving water dynamic. Based on enumerative induction and Bayesian-lite inference integrating the Markov property, we can estimate that, over the next 10 weeks, PANW stock should land between $155 and $190, which is admittedly a wide dispersion.\nHowever, here's the difference between this output and Black-Scholes: most of the probability mass should land above the spot price. Further, we would expect peak probability density under 2-8-D conditions to materialize between $170 and $177. That's a much tighter range to target.\nGiven the market intelligence above, aggressive speculators will likely appreciate the 175/180 bull call spread expiring March 20. For this trade to be fully profitable, PANW stock will need to hit $180 at expiration, which is a realistic target based on both my Markov model and Black-Scholes. If it does, the maximum payout would be a bit over 170%.\nPerhaps most enticingly, the breakeven price sits at $176.85, which is very close to peak probability density.\nImage: Shutterstock","kind":"highlight","is_publish_news":true,"is_publish_highlight":false,"is_publish_live":false,"is_publish_wemedia":null,"editions":null,"column":"","sentiment":"1","news_tag":"","news_rank":0,"symbols":[],"gpt_button":0,"need_auth":false,"code":"91000000","status":"200"},"commentList":[],"isCommentEnd":true,"newsSizeData":{"likeSize":0,"commentSize":0,"repostSize":0,"favoriteSize":0,"likeStatus":false,"favoriteStatus":false},"APP":{"userAgent":"Mozilla/5.0 AppleWebKit/537.36 (KHTML, like Gecko; compatible; ClaudeBot/1.0; +claudebot@anthropic.com)","isDev":false,"isTTM":true,"tenantId":"TBGLOBAL","deviceId":"web-server-community-laohu8-v3","version":"4.36.2","shortVersion":"4.36.2","platform":"web","vendor":"web","appName":"ttm","isIOS":false,"isAndroid":false,"isTiger":false,"isTHS":false,"isWeiXin":false,"isWeiXinMini":false,"isWeiBo":false,"isQQ":false,"isBaiduSwan":false,"isBaiduBox":false,"isDingTalk":false,"isToutiao":false,"isOnePlus":false,"isHuaWei":false,"isXiaomi":false,"isXiaomiWebView":false,"isOppo":false,"isVivo":false,"isSamsung":false,"isMobile":false},"href":"/m/news/2608238341","isCrawlerRequest":true}