INSIDEOPTIONS™: Profit from unusual trading activity

MU Trade Idea

11/10/11: Sellers tried to bully Micron Technology down early today, but now the bulls are stepping in to defend the chip stock above around the $5 level. Heat Seeker shows the purchase of about 8,400 December 5 calls. The first bunch priced for $0.67, followed by more at $0.56. Volume is roughly 4 times open interest in the strike. MU is now coming off the lows but is still down 4.30 percent to $5.12. MU already reported earnings in late September, but has some conferences on Nov. 15 and Nov. 16.

11/15/11 Update: Last Thursday, the Heat Seeker lit up in MU with the December 5 calls trading to $.60. MU up over 6% today and those calls moving about 50%. Might be a consideration to lighten up some with this pop as the Dec 5 calls at $.90-$.92 now.

11/16/11 Final update: Last Thursday, the Heat Seeker lit up in MU with the December 5 calls trading to $.60. We updated yesterday as shares popped and the calls moved a bit. MU up over 20% after a jury ruled against Rambus in an anti-trust lawsuit with Micron and Hynix Semiconductor. With this pop, Might be a consideration to reduce the balance as the Dec 5 calls at $1.68-$1.88 now.

85% profit in 6 days

CS Trade Idea

11/29/11: Credit Suisse popped higher yesterday, and now today the bulls are looking for more. Heat Seeker shows the purchase of more than 5,000 January 24 calls for $1.45 and $1.50 against open interest of just 16 contracts. Overall options volume in the name is 4 times greater than average so far today, with calls outnumbering puts by more than 2 to 1. CS is off the lows and now down 0.04 percent to $22.71.

11/30/11: David cited the activity in CS yesterday with the January 24 calls at $1.45 and $1.50. CS up over 7% this morning and those calls moving. These have time for more but we think it prudent to take what is given here on this pop and might consider reducing the risk here with the Jan 24 calls at $2.10-$2.20

40% profit in 1 day

SFI Trade Idea

12/5/11: iStar Financial is a commercial real estate lender. We've seen some mojo in quasi-related names like CBRE (CBG) recently, plus of course bullishness in the financials. Well, SFI has been trying to base around its current levels since August, and now some long-term buyers are stepping in. Heat Seeker shows the purchase of more than 2700 July 6 calls for $1.05 and $1.10 against no previous open interest. Overall options volume is 6 times greater than average, with not a single put changing hands thus far. Short interest in the name is over 20 percent. SFI rose 1.69 percent to $5.42 in morning trading.

12/6/11: SFI has made a nice run since David cited the activity yesterday morning and those July 6 calls have moved about 50%. These have plenty of time for more upside but might take what is given the past two sessions and lighten up some with the July 6 calls at $1.65-$1.75 now.

12/12/11: David cited the activity in SFI last Monday with the July 6 calls and we updated the next day as shares popped and the calls moved a bit. SFI has been pulling back since the update and trades over 3% lower this morning. These calls still have plenty of time for more upside but are trading back/near entry now. One could hold but might be a consideration to reduce the balance here with the July 6 calls at $1.10-$1.25 now.

32.5% profit in 7 days