Traders are looking for a quick pop in shares of NXP Semiconductors.
More than 2,500 July 92.50 calls were purchased for $1.55 to $1.80 late yesterday. This represents new positions, as open interest in the strike was only 476 contracts before the session began.
These long calls lock in the price where the stock can be purchased, gaining with a rally and providing leverage to the underlying shares. But the contracts will quickly lose value if the stock stalls or drops by expiration at the end of tomorrow's session. (See our Education section)
NXPI fell 1.96 percent to $92.88 yesterday. The chip maker has pulled back since hitting an all-time high of $114 on June 1 but has been trading sideways in a tight range for the last week.
The company is scheduled to announce quarterly results on July 29 after the market closes.
Yesterday's total option volume in the name was 50 percent higher than its daily average for the last month. Overall calls outnumbered puts by a bullish 4-to-1 ratio.
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