How the bulls are playing Marvell

David Russell (
December 27, 2013

Semiconductors have been coming to life, yesterday traders turned bullish on Marvell Technology.

optionMONSTER's Heat Seeker system detected the purchase of some 20,000 February 14 calls in volume far above the strike's previous open interest of just 1,965 contracts, clearly showing that new positions were established. The initial blocks priced for $0.64, though premiums at one point traded as high as $1.01.

These long calls lock in the price where a stock can be purchased, allowing investors to benefit from a rally without the cost and risk of owning shares. They can also generate significant leverage if there is a decent move in the right direction. (See our Education section)

MRVL rose 2.53 percent to $13.76 yesterday and is up 90 percent so far this year amid strong quarterly results. The stock pulled back in the last month but is now bouncing above its 50-day moving average, which could make some chart watchers expect the uptrend to continue.

Overall option volume was 2 times greater than average in the name, with calls accounting for a bullish 79 percent of the total.

(A version of this post appeared on InsideOptions Pro yesterday.)

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