Learn the trade here. Make it on tradeMONSTER

Options Trading News

October 5, 2011  Wed 9:52 AM CT

SWKS: SEE CHART GET CHAIN FIND STRATEGIES
The bulls are back in Skyworks Solutions.

Yesterday, optionMONSTER's Heat Seeker program detected upside call buying in the semiconductor stock. Today, the activity is more complex, with investors selling about 2,000 November 18 puts for $1.75 and buying 3,500 November 18 calls for $2.20. Volume is more than 5 times open interest in both strikes.

The trade will profit from a rally or lose money if SWKS pushes lower. It cost about $420,000 and is a highly leveraged strategy that's similar to owning stock. (See our Education section)

SWKS is up 4.35 percent to $18.95 in morning trading. The company's chips are used in a broad array of industries, but it is especially focused on wireless devices and Apple's iPhone. Its last earnings report on July 21 beat on the top and bottom lines, and management issued bullish guidance.

Nonetheless, the share price has been roughly cut in half since February. It's now back to the same levels where SWKS traded in late 2010 before ripping higher, which could make some chart watchers think it's now attractively valued.

Overall option volume is triple the daily average so far today.
Share this article with your friends


Related Stories

SWKS

Momentum bulls target Skyworks Solutions

August 13, 2014

Today's strategy will earn more than 100 percent if the high flying chip stock climbs just 12 percent by November.

TRADING WEEKLY OPTIONS

The fastest money in the market
View full report »

Premium Services

Education & Strategy

It's all skewed up

Most new option traders know little about implied volatility, and learn the hard way. Today we want to help you...

View more education articles »
optionMONSTER stockMONSTER tradeMONSTER