MIPS call action surges with buyout talk
Mike Yamamoto | email@example.com
More than 7,000 September 8 calls traded in a strong buying pattern, mostly for $0.25, $0.30, and $0.35. Open interest in the strike at the start of the session was 1,042, indicating that this was new activity.
MIPS closed a penny higher on the day at $7.31. Shares of the company, which designs and makes chips used in household consumer devices, have been rising sharply since the end of August after a Benchmark analyst speculated that MIPS would make some kind of deal in the next four months.
The stock would need to gain roughly 13.5 percent for those long calls to be profitable at the September expiration in less than two weeks. If the shares are below the $8 strike price at that time, the options will expire worthless. (See our Education section)
Total volume of 9,425 options was nearly 10 times the daily average in the name. Only 121 of those contracts were puts.