Pete Najarian Sees Unusual Option Activity in $SMH & $SGMS

On today’s CNBC Halftime Report, Pete is seeing unusual option activity in SMH and updated us on an SGMS trade from yesterday.

Yesterday, Pete saw traders buying 34,000 November $69 puts, with the stock trading at &87, which is a bet that is way out of the money. Today, traders were buying the Aug $84 puts for $1. These traders are looking for a near-term pullback in the chip sector. Pete is still long MU and likes some other names in the chip sector, but Pete is taking note and paying attention closely, especially after a higher run-up into earnings season.

Also, Pete updated us on the unusual activity in SGMS from yesterday. Traders bought calls yesterday for $4.40, and today those same calls are trading over $6 today. Pete saw some call rolling up to the $35 strike, and he thinks that trimming the position might be the best route to go if traders are in this one.