An investor bought calls in Analog Devices only a few days ago and is already rolling the bullish position higher.
optionMONSTER's market scanner shows that 2,200 March 52.50 calls were sold for $3.10 and 6,600 March 57.50 calls were purchased for $0.50 yesterday. Volume was below open interest in the lower contracts, indicating that a bullish position was being rolled to a higher strike. The original March 52.50 calls were purchased only a week ago , as documented on our log of unusual option activity .
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 rose 1.3 percent to $55.41 yesterday but is down 10 percent in the last three months. The analog-chip manufacturer reported bearish results on Jan. 14 and is expected to announce its next quarterly numbers on May 17.
Overall option volume was 6 times greater than average. Calls outnumbered puts by a bullish 93-to-1 ratio.
More From optionMONSTER