OptionsHouse

Options Trading News

December 13, 2012  Thu 3:47 AM CT

ALTR: SEE CHART GET CHAIN FIND STRATEGIES
Chip maker Altera is trying to break out of its recent range, and some traders apparently believe that it will succeed in the next six months.

optionMONSTER's Heat Seeker system detected the purchase of 1,231 June 34 calls yesterday, almost all of them going for $2.65. Open interest in the strike was just 14 contracts at the start of the session, so this is fresh buying.

The long calls are looking for ALTR to gain roughly 11 percent by mid-June 2013. These options could be sold earlier if premiums increase with a rally in the shares before then, but the calls will expire worthless if the stock doesn't rise at least to the $34 strike price. (See our Education section)

ALTR slipped 0.12 percent yesterday to close at $33.04 as it tried to recover from recent losses. Shares of the semiconductor company had gapped higher in July after beating quarterly estimates and raising its dividend but dropped sharply from above $38 to below $30 between mid-September and mid-October. Since then the stock has been trapped between about $30 and $32.50.

Calls outnumbered puts by more than 5 to 1, a reflection of yesterday's bullish sentiment.
Share this article with your friends


Invest Like a Monster - San Antonio: October 9-10

Premium Services

Archived Webinar

Education & Strategy

Real vs. Synthetic

We now know that there are two ways of creating a call position, a put position, and a stock position. We can simply use the actual real security or we can recreate it synthetically. We can create these positions in both long and short forms and this ability sets up an interesting scenario--an arbitrage!

View more education articles »