Maxim Integrated Products saw heavy call buying just before the closing bell on Friday.
optionMONSTER's Heat Seeker monitoring system detected the purchase of 15,400 January 39 calls for $1.55 to $1.89 in the last 20 minutes of the session. This is clearly fresh buying, as open interest in the strike was only 936 contracts before the trades appeared.
These long calls lock in the price where the stock can be purchased through mid-January no matter how far it might climb. They could be sold earlier at a profit if premiums rise with a rally before then, providing potentially significant leverage, but the contracts will expire worthless if shares remain below $39. (See our Coaching section)
MXIM rose 3.28 percent to $38.15 on Friday and is up 11 percent in the last three months. The stock fell sharply on Oct. 23 after earnings and revenues missed estimates but spiked above $42 three days later on reports that Texas Instruments was in negotiations about a possible acquisition of the chip maker. Maxim's next quarterly results are estimated to come out Jan. 21, the week after Friday's calls expire.
Total option volume in the name was just shy of 17,000, nearly 5 times its daily average for the last month. Only 81 puts changed hands, reflecting the session's bullish sentiment.
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