Altera has held its ground better than most chip makers, but now
the bears are looking for a correction.
optionMONSTER's Depth Charge tracking system detected the purchase
of about 3,000 May 40 puts for $0.93 and the sale of an equal
number of May 35 puts for $0.18. Volume was more than twice open
interest in both strikes.
The trade resulted in a cost of $0.75 and will earn a maximum
profit of 566 percent if ALTR closes at or below $35 on expiration.
This trade, a put spread, uses income from selling contracts that
are further out of the money to buy options that are closer to the
It increases leverage by lowering the cost basis, but also caps the
profit if the stock falls more than expected. (See our Education
ALTR is down 1.68 percent to $42.77 in morning trading. The shares
have been trending steadily higher since late 2008, riding a wave
of demand for the company's programmable chips, and are now around
their highest level since the tech bubble burst more than a decade
Unlike most semiconductor names, ALTR has managed to remain near
its highs in the last two months. However, today's downside trade
reflects a belief that the stock will succumb to the broader
bearishness that's been sweeping the sector.
Puts outnumber calls by 28 to 1 so far today, which reflects the