Traders are coming back to QLogic after a doubling their money last month.
optionMONSTER's Heat Seeker monitoring program detected the purchase of 3,500 January 12.50 calls for $0.85 to $1. Volume surpassed previous open interest of 2,143 contracts, which indicates new positions were initiated.
Calls lock in the price where investors can buy shares in the provider of networking chips. That lets them play for a rally at limited cost, and will open the door to potentially significant leverage if the stock moves in the right direction. (See our Education section.)
The activity is especially noteworthy because those same January 12.50 calls lit up Heat Seeker on Dec. 17 for $0.35 to $0.40. Our premium subscribers cashed in for $0.80 the next day as QLGC powered higher.
It was strong again Wednesday, advancing 1.52 percent to $13.32 despite weakness in the broader market. The company has reported better-than-expected earnings and revenue for the last three quarters, and the stock is now back to its highest levels since mid-2012.
Total option volume was 13 times greater than average in the session. Calls outnumbered puts by 37 to 1.
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