Bulls are trying again in Teradyne
Call buyers are returning to Teradyne once again.
More than 3,500 March 21 calls were purchased for $0.15 to $0.20 yesterday, according to optionMONSTER's Heat Seeker tracking system. Open interest in the strike was just 910 contracts before the trades appeared, indicating that this is fresh buying.
The semiconductor-testing company has seen bullish option activity several times in the last six months . But it has faced formidable resistance near the $21 level for more than a year.
Long calls lock in the price where investors can buy a stock, which lets them position for a rally with limited capital. That can be safer than purchasing shares directly because only the cost of the options can be lost on a pullback. The calls can be sold anytime before they expire but will lose value if the stock falls. (See our Education section)
TER rose 1.35 percent to $19.50 yesterday. Shares bounced twice at the $18 level in the last month--most recently following its Jan. 28 earnings report--but have been trading sideways for the last week with their 50-day moving average.
Yesterday's call buying made up the bulk of Teradyne's total option volume, which was 7 times its daily average for the last month. Overall calls outnumbered puts by more than 19 to 1, a reflection of the session's bullish sentiment.
More From optionMONSTER
