Nvidia has been holding support around $12, and now the bulls
are looking for the graphics-chip maker to rally.
optionMONSTER's Heat Seeker system detected unusual activity in the
semiconductor stock on Thursday and Friday. First they bought the
June 12 calls for $1.11, then they came back the next day to snap
up the September 13 calls for $1.05 and $1.06. Volume exceeded open
interest both sessions, indicating that new money was put to work.
, which lock in the price where the stock can be purchased, can
generate major leverage in the event of a rally. But they also have
the potential to become worthless if the stock doesn't move. (See
NVDA rose 1.8 percent to $12.41 on Friday. The stock has bounced
near the $12 area several times in the last 18 months, which could
be leading some traders to think that it's due for another rebound.
The last earnings report in November was mixed, with earnings and
revenue better than expected but guidance below consensus
Total option volume was more than quadruple average amounts on
Thursday and Friday. Calls accounted for more than 80 of the
activity in both sessions.
(A version of this post appeared on
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.