The bulls are taking a look at NXP Semiconductor as the Dutch
company continues to report strong quarterly results.
optionMONSTER's Heat Seeker monitoring program has detected steady
buying in the May 25 calls. They initially fetched $1.80, but then
premiums fell to $1.15 and $1.20 after the shares retreated. Volume
has continued to build throughout the session and surpasses 13,300
contracts. That's greater than previous open interest of 11,694,
indicating new activity.
Those holders now have the
right to buy
NXPI for $25 in the next four weeks no matter how high it might
climb during that period. There is potential for significant
leverage if the stock rallies, while the amount of money they'll
lose in the event of a pullback is limited. (See our
section for more on how options can be used to manage risk.)
NXPI is up 4.5 percent to $26.93 and is back to its highs of the
session. It reported earnings of $0.72 a share yesterday afternoon
on revenue of $1.09 billion, better than the $0.49 and $1.07
billion expected by analysts. Previous reports also beat estimates.
The stock peaked above $32 in March and then retreated to the same
$25 area where it hit resistance last year. That could be leading
some chart watchers to think that it's at an attractive entry
There is also bullish activity across the broader semiconductor
industry today following strong results from companies like Texas
Instruments and ARM Holdings. The Heat Seeker also showed upside
Overall option volume in NXPI is more than 8 times greater than
average so far today, with calls accounting for about 90 percent of
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.
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