Markets

Call buyers come back to Xilinx

Xilinx has been holding its ground after crashing last month, and now the bulls are stepping in.

optionMONSTER's Heat Seeker program detected the purchase of 7,200 September 50 calls yesterday, most of which priced for $0.77 to $0.80. Volume was more than triple the strike's previous open interest of 1,956 contracts, indicating that this is fresh buying.

Long calls lock in the price were a stock can be purchased, letting investors position for a rally with limited risk. The contracts can also generate significant upside leverage, but they will expire worthless if shares remain below $50 through mid-September. (See our Education section)

XLNX rose 0.45 percent to $46.86 yesterday. The system-on-a-chip maker climbed above $55 in March but fell to $45 following a poor earnings report, roughly the same price level where it peaked in 2013 and early this year. It was also resistance all the way back in 2002, which could make some chart watchers expect it to provide support now.

Total option volume in the name was quadruple its daily average for the last month, with calls outnumbering puts by a bullish 28-to-1 ratio.

(A version of this post appeared on InsideOptions Pro yesterday.)

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

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

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