Calls chasing uptrend in Analog Devices
Traders are positioning for Analog Devices to build on recent gains.
optionMONSTER's monitoring system detected the purchase of more than 4,000 October 65 calls mostly for $1 to $1.10 yesterday. This represents fresh buying, as open interest in the strike was a mere 81 contracts before the session began.
Long calls lock in the price where investors can buy stock, allowing them to profit from a rally with limited capital at risk. Their cheap cost can also generate significant leverage on a percentage basis if shares move in the right direction. (See our Education section)
ADI fell 0.11 percent to $62.89 yesterday but is up 8 percent in the last three months. The chip maker reported bearish quarterly results on Aug. 17.
Overall option volume was 8 times greater than average in the name yesterday. Calls outnumbered puts by a bullish 80-to-1 ratio.
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