Is Universal Display ready to shine?

By
A A A

Universal Display has been consolidating since early 2011, and one investor apparently believes that it is poised for a rally.

optionMONSTER's tracking systems detected the sale of 1,275 May 40 puts for $3.25 and the purchase of an equal number of May 35 puts for $1.25. Volume was more than twice open interest at both strikes.

Known as put credit spread , the strategy reflects a belief that PANL will close at or above $40 on expiration. It's currently up 3.37 percent to $40.19 in morning trading.

In return for making that bet, the investor collected $2 of income. If the trader is wrong, the maximum loss will be $3.

The transaction also takes advantage of high implied volatility in the stock, which is at 66 percent versus its 45 percent historic level. The shares are up 3.09 percent today to $40.08. (See our Education section)

PANL owns patents on organic light-emitting diodes, which are more efficient than normal LEDs. Its technology has a wide range of potential applications, from lighting to flat-screen televisions.

The company's shares, which more than tripled between April 2010 and April 2011, have been swinging in a range since then. The last earnings report on Feb. 28 beat expectations on the top and bottom lines, but outlook was below expectations amid uncertain timing on orders from Samsung.

Overall option volume is triple the daily average so far today.




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.

Copyright © 2010 OptionMonster® Holdings, Inc. All Rights Reserved.


This article appears in: Investing , Options

Referenced Stocks: PANL

optionMONSTER

optionMONSTER

More from optionMONSTER:

Related Videos

Stocks

Referenced

100%

Most Active by Volume

33,110,376
  • $113.99 ▲ 1.77%
25,034,179
    $17.98 unch
24,486,872
  • $7.41 ▲ 2.07%
20,864,535
  • $7.39 ▼ 2.76%
18,600,501
  • $8.30 ▼ 0.36%
17,530,211
  • $8.14 ▲ 3.17%
17,299,208
  • $93.79 ▲ 2.74%
14,669,760
  • $25.78 ▼ 0.19%
As of 12/26/2014, 04:15 PM


Find a Credit Card

Select a credit card product by:
Select an offer:
Search
Data Provided by BankRate.com