Broadcom has been churning at multiyear highs, and the bulls are looking for a breakout.
optionMONSTER's Heat Seeker monitoring program detected the purchase of more than 3,900 January 44.50 calls, most of which priced for $0.28. Volume was more than 120 times open interest at the strike, which indicates new money was put to work on the long side.
Calls lock in the price where the provider of communications chips can be bought. Investors use them to ensure a stock won't run away from them. The contracts can also generate significant leverage on a percentage basis. (See our Education section.)
BRCM declined 0.12 percent to $43.33 on Friday, and remains slightly below its peak of $44.22 earlier in the month. That was its highest price since the first half of 2011. The company has benefited from bullish sentiment toward chip makers, along with better-than-expected earnings and revenue in recent quarters.
Total option volume was about average in the session, with calls outnumbering puts by almost 10 to 1.
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