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January 22, 2014  Wed 2:45 AM CT

MXIM: SEE CHART GET CHAIN FIND STRATEGIES
A large trader is looking for Maxim Integrated Products to make a sharp move higher or lower.

optionMONSTER's Depth Charge system shows that 10,000 May 30 puts were bought for the ask price of $2.60 yesterday. This is clearly a new position, as open interest in the strike was just 260 contracts before the trade appeared.

Just afterward, a huge block of 620,000 MXIM shares was bought for $28.70. Combined with the puts, this creates a delta-neutral position that is focused on a big move in either direction and/or actual volatility that is greater than that implied by the option price. (See our Education section)

MXIM finished the day at $28.70, up 0.53 percent on the session. The chip maker traded above $31 in late October but has tested support at $27.50 several times in the last six weeks.

Total option volume in the name topped 13,100 contracts yesterday, 9 times its daily average for the last month.
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Options Academy: Ron's Risk Calculation--A Real Life Example

It is rare that I get a chance to give a real-life, real-time example in my articles that the readers were not only following but were actually involved in at the time the event is happening. Well, that is where we are right now in our QQQ trade from last week. Let's recap the trade itself.

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