$CY call prices surge fourfold

Bullish option traders collected exponential profits in Cypress Semiconductor (CY) today for the second session in a row.

Investitute’s proprietary programs identified unusual activity in the same strike on two consecutive sessions last week:

–On May 29, 5,000 July $17 calls were purchased for $1.29 to $1.35 above open interest of 47 contracts as part of a bullish roll with shares at $17.40.
–On May 30, another 5,000 July $17 calls were bought for $1.55 to $1.65 below open interest of 5,669 contracts but apparently adding to the previous day’s volume.

Those calls sold for as much as $5.30 today, 4 times their initial purchase price. The stock rose 28.1% in the same time frame, a large move but nowhere near that of its options on a relative basis.

It is the second winning trade in the name posted on Investitute in as many days.

Long calls lock in the price where investors can buy a stock, letting them position for a rally at limited cost with the potential for significant leverage. They carry less risk than owning shares because the most that can be lost is the price of the options no matter how far the stock might fall.

CY was up 0.59% to $22.20 today. Germany’s Infineon Technologies (IFFNY) confirmed yesterday that it will buy the chip maker for more than $10 billion.