Chip stock ON Semiconductor Corp (NASDAQ:ON) is on the rise today, last seen up 4.2% at $47.46, after the company announced a $6 billion share buyback plan. Set to begin in 2026, the plan will run for three years, replacing the current $3 billion program expiring at the end of December. This year, the board allocated all of its free cash flow to share repurchases.
Today's pop has ON on track to snap a four-day losing streak, jumping off familiar support at the $45 region. Still, shares are still down 24.6% since the start of the year and recently dropped below all daily moving averages between the 10- and 320-day trendlines.
Option bulls are blasting ON after the news, with 16,000 calls exchanged so far -- 10 times the volume typically seen at this point -- in comparison to 658 puts. The November 50 call accounts for most of this volume, with new positions being opened there as well.
ON's "oversold" condition could work in the bulls' favor, per the stock's 14-day relative strength index (RSI) of 27. An unwinding of short interest could also give the shares a boost, with 9.1% of the equity's float sold short. At its average trading pace, it would take shorts over four days to buy back their bearish bets.
