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• MXIM 100% Rate It

One investor is guarding against potential downside in Maxim Integrated Products as the chip maker continues to drift.

optionMONSTER's Depth Charge monitoring system detected the purchase of 2,500 February 28 puts for $2.55 and the sale of an equal number of February 31 calls for $0.57. Volume is more than 12 times open interest at both strikes.

The trade cost $1.98 and is highly leveraged to downside in the share price. It also leaves the investor short if the stock rallies to $31 or higher, so he or she may own the equity and be using the options for protection. Known as a collar , the strategy is a common hedging technique. (See our Education section for more on hedging strategies.)

MXIM is down 0.15 percent to $27.36 in morning trading and has been fluctuating in a range despite repeatedly strong financial reports. The lack of performance comes at the same time that weak PC sales have hurt sentiment toward some semiconductor companies. Investor attention also seems to be increasingly focused on materials, energy, and financials in the last two months.

Overall option volume in MXIM is 7 times greater than average so far today, according to the Depth Charge.

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