$MRVL call prices soar 10-fold

Bullish option traders continue to cash in on Marvell Technology after buying into the name for months.

Last month Investitute’s tracking systems detected bullish option activity in the same contracts for two consecutive sessions:

–On March 13, 7,800 May $25 calls were purchased at the same time for $0.05 to $0.07.
–On March 14, 18,000 May $25 calls bought for $0.05 to $0.08 with shares at $19.65.

Those calls traded up to $0.62 today, 10 times their average purchase price. The stock rose about 24% in the same time period, underscoring how options can far outperform their underlying shares on a relative basis.

It is the third winning trade in the name posted on Investitute in less than a week.

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.

MRVL hit a 52-week high of $24.11 this afternoon before pulling back to close at $23.71, off 0.13% on the session. The chip company has rallied sharply this year along with other semiconductor stocks.