$MRVL keeps paying for bulls

Bullish option traders scored major profits in Marvell Technology today for the third time in less than two weeks.

On April 12, Investitute’s tracking systems showed that 5,360 Weekly $23.50 calls expiring on May 3 were bought for $0.58 as part of a bullish roll with shares at $23.11. This was clearly a new position, as open interest in the strike was a mere 60 contracts before that session began.

Those calls traded for as much as $2.15 today, more than 3.5 times their purchase price. The stock rose 10.77% in the same time frame, illustrating the kind of leverage that can be achieved with options.

It is the third winning trade in the name posted on Investitute since the beginning of last week.

Long calls lock in the price where a stock can be purchased, gaining with a rally and providing leverage to the underlying shares. The contracts can quickly lose value if the stock stalls or pulls back but also carry less risk than owning the shares themselves.

MRVL was up 1.39% to $25.47 today. UBS raised its price target on the chip company to $29 from $22 this morning, following a similar move at Citi to $28 from $22 on April 17.