Applied Materials has pulled back following a nice run, and
traders think the bottom is in.
optionMONSTER's monitoring systems detected the sale of almost
5,300 October 13 puts for $0.29. Volume was almost 11 times open
interest at the strike, indicating that new positions were
The investor is now on the hook to buy shares in the maker of
semiconductor equipment for $13 if they're below that level on
expiration. Above it, he or she will keep the $0.29 as profit while
the contracts expire worthless.
Traders sometimes use this strategy when they like a stock but
don't want to buy the shares immediately.
also lets him or her profit from the normal process of
, which affects all options. (See our
AMAT trading at $14.94 this morning, up 0.84 percent on the day and
31 percent so far this year. The stock has been trending higher as
a strong economy and mobile demand boost sentiment toward the
semiconductor industry. It's been holding support at its 50-day
moving average in recent sessions, which could make some traders
think that further downside is limited.
Total option volume in the name tops 7,000 contracts today, well
above its daily average.
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.