Last-minute buyer shops for Atmel
David Russell | email@example.com
optionMONSTER's Heat Seeker tracking program detected the purchase of more than 10,000 November 6 calls, most of which priced for $0.25, against previous open interest of just 671 contracts. Almost all the volume occurred in the final 10 minutes of trading, suggesting that it was the work of one large institutional investor.
Those long calls lock in $6 as an entry price on the beaten-down chip maker, which peaked above $16 early last year but has lost almost two-thirds of its value since. The long calls could generate some nice leverage if ATML rebounds, but they will expire worthless in the absence of a rally. (See our Education section)
ATML fell 2.56 percent to $5.33 yesterday, its lowest closing price since August 2010. The company has been struggling against weak revenue and has trimmed costs to maintain profits.
Other semiconductor companies have also been hit by slowness in the global economy. The Heat Seeker also detected bullish activity in Marvell Technology late yesterday, another chip maker trading at long-term lows, so investors may be starting to bargain-hunt in the sector.
Overall option volume was 40 times greater than average in ATML, with calls outnumbering puts by more than 280 to 1.