Buyer likes Spreadtrum before report
David Russell | [email protected]
optionMONSTER's Heat Seeker monitoring program detected the purchase of almost 1,900 November 23 SPRD calls for $1.20 to $1.40. Volume was more than twice open interest at the strike, indicating that a new position was initiated.
Those long calls lock in a $23 entry price over the next 2-1/2 weeks, which covers the company's next earnings report on Nov. 8. They can generate some big leverage in the event of a rally but also become worthless if it doesn't move. (See our Education section)
Shares of the Shanghai-based company, the only major chip maker on mainland China, rose 1.54 percent to $23.05 yesterday. The stock is up 27 percent in the last three months, compared with a 4 percent decline for the Philadelphia Semiconductor Index in the same period. It has climbed steadily since early 2009, though results have been mixed in recent quarters.
Total option volume was 6 times greater than average in the name on Wednesday, according to the Heat Seeker. Calls outnumbered puts by a bullish 10-to-1 ratio.