Learn the trade here. Make it on tradeMONSTER

Options Trading News

May 8, 2013  Wed 12:06 PM CT

SMH: SEE CHART GET CHAIN FIND STRATEGIES
Semiconductors have been coming to life, and big institutional players don't want to be left behind.

optionMONSTER's Heat Seeker monitoring system detected the purchase of some 7,100 June 40 calls on the Market Vectors Semiconductor exchange-traded fund for $0.25 and $0.30. Volume was more than 500 times open interest at the strike, indicating that new money was put to work on the long side.

These long calls lock in the price where shares can be purchased in the fund, whose big holdings include Intel, Taiwan Semiconductor, and Texas Instruments. The contracts stand to generate significant leverage if SMH continues to climb, providing upside exposure at a fraction of the cost. That also limits losses if it drops. (See our Education section for more on how options can be used to manage risk.)

SMH is up 1.16 percent to $38.36 this afternoon. It's up more than 10 percent in the last month as sentiment has improved toward the global economy but lagged the broader market in the preceding year.

Total option volume is 7 times greater than average in the fund so far today, with calls outnumbering puts by 140 to 1.
Share this article with your friends


Related Stories

SMH

Put spread hits semiconductor ETF

June 26, 2014

The Market Vectors Semiconductor Fund has run up from support in the last five weeks, but a huge put spread is positioning for a potential drop.

TRADING WEEKLY OPTIONS

The fastest money in the market
View full report »

Premium Services

Free Webinars

Education & Strategy

How to navigate earnings season

We are embarking on one of the most frustrating times for new option traders: earnings season.Many new traders buy options,...

View more education articles »
optionMONSTER stockMONSTER tradeMONSTER