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$CY pays off again for bulls
Option traders are reaping profits in Cypress Semiconductor for the third time in as many sessions. On May 29, Investitute’s market scanners flagged the purchase of 5,000 January $20 calls for $0.75 with shares at $17.27. This was clearly fresh buying, as volume was more than twice the strike’s previous open interest of 2,300 contracts. […]
Option traders are reaping profits in Cypress Semiconductor for the third time in as many sessions.
On May 29, Investitute’s market scanners flagged the purchase of 5,000 January $20 calls for $0.75 with shares at $17.27. This was clearly fresh buying, as volume was more than twice the strike’s previous open interest of 2,300 contracts.
Those calls sold for $2.60 today, 3.5 times their purchase price. The stock rallied 28.43% in the same time frame, a large move but nowhere near that of its options on a relative basis.
It is the third winning trade in the name posted on Investitute since June 3.
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 reached a high of $22.27 in midday trading before pulling back to $22.13 in the final hour of the session, off 0.32% on the day. Germany’s Infineon Technologies (IFFNY) confirmed on June 3 that it will buy the chip maker for more than $10 billion.