Applied Materials attracts upside play
At least one trader is looking for more upside in Applied Materials.
optionMONSTER's market scanner shows that 4,000 Weekly 29 calls expiring on Sept. 23 were purchased mostly for $0.64 at the same second on Friday. This is clearly a new position, as volume was well above the strike's open interest of 835 contracts.
Long calls lock in the price where investors can buy stock, allowing them to profit from a rally with limited capital at risk. Their cheap cost can also generate significant leverage on a percentage basis if shares move in the right direction. (See our Education section)
AMAT fell 3.12 percent to $28.86 on Friday but is up 22 percent in the last three months. The chip-equipment maker's last quarterly report on Aug. 18 was bullish.
Overall option volume was about average in AMAT on Friday. Calls outnumbered puts by a bullish 4-to-1 ratio.
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