Marvell decline draws long-term buyer

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Marvell Technology pulled back last week, but one investor is bullish in the longer term.

optionMONSTER's Heat Seeker tracking system detected the purchase of 5,000 January 17.50 calls for $1.39. Equal-sized blocks were also sold in the January 12.50 puts for $1 and the January 22.50 calls for $0.32, resulting in a net cost of $0.07.

The investor now stands to earn more than 7,000 percent if the chip maker closes at or above $22.50 on expiration early next year. Aside from that initial $0.07 outlay, he or she can only lose money if it goes below $12.50.

MRVL declined 3.71 percent to $15.46 on Friday. Shares have been fighting their way higher in 2012 after hitting a two-year low last summer. They're down more than 7 percent in the last week, which could make some traders consider the current level an attractive entry point.

Overall option volume was 7 times greater than average in the session, according to the Heat Seeker.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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



This article appears in: Investing , Options


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