Broadcom is at its highest level in more than three years, and short-term traders are looking for more gains.
optionMONSTER's Heat Seeker system detected heavy buying in the September 41 calls yesterday, with more than 5,000 trading mostly for $0.29 to $35. The volume was well above the strike's previous open interest of 2,416 contracts, indicating that new positions were established.
These long calls lock in the price where the stock can be purchased, providing potentially significant leverage to a rally. But they will quickly lose value if shares fall by expiration at the end of tomorrow's session. (See our Education section)
The trades follow bullish call buying earlier this month at the 39 strike, as reported on our InsideOptions Pro subscription service. Those contracts saw premiums more than triple just three sessions later.
BRCM rose 1.24 percent to close at $40.93. The chip maker reached an intraday high of $41.14 on Sept. 8, its highest price since March 2011.
Yesterday's total option volume in the name was more than double its full-session average for the last month. Overall calls outpaced puts by a bullish 5-to-1 ratio.
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