OCZ rumors take traders for wild ride
David Russell | firstname.lastname@example.org
The maker of sold-state computer memory saw a high of $6.86 and a low of $5.56 as traders placed bets on whether it will be acquired. On Friday, it exploded higher by 30 percent as the rumors took hold.
optionMONSTER's tracking systems lit up with activity in the name, most of it bullish. Volume in the August 6 calls surged past 11,000 contracts as investors snapped up large blocks for $0.55 and $0.60. Some of the trades were matched against selling in the August 8 puts.
Overall, more than 48,000 contracts traded in the name, compared with an average turnover of about 10,000. The stock was even more active, trading some 19.4 million shares--the second highest total in the company's history.
Despite all the volatility, OCZ ended the session down just 1.42 percent at $6.27. The small-cap tech name has been on a crazy ride in the last two years, more than quintupling between mid-2010 and mid-2011, before giving up most of those gains between February and early June.
The speculation at various times considered Seagate Technology a potential buyer, which was also fueled by rumors that OCZ had canceled a shareholder meeting.
Calls outnumbered puts by more than 2 to 1, a further indication of yesterday's bullish sentiment.