Vitesse Semiconductor has given up its gains for the year, but one option trader isn't giving up on the chip maker.
VTSS is up 2.1 percent to $2.43 this morning after seeing its lowest close and intraday range yesterday. Shares traded above $4 in late February and early March but since then have not closed above their 10-day moving average.
optionMONSTER systems show that 5,000 VTSS options have already traded today, dwarfing the daily average of just 70 contracts.
A trader sold 2,500 May 2.50 calls for $0.05 against open interest of 2,757 and, seconds later, bought 2,500 June 2.50 calls for the ask price of $0.35 on a wide bid/ask spread. The previous open interest at that strike had been 415 contracts, so that was a new position.
The trader is rolling out a long position to June as the May contracts expire at the end of today's session. So the investor is willing to pay for another month of upside potential. (See our Education section)
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Why education is key to options
People get into option trading for a number of reasons, but there are three primary motivations: to increase income, to...
