Onetime high-flyer Cree has been rebounding recently, and traders are anticipating more gains in the very short term.
More than 2,017 September 28.50 calls traded in a strong buying pattern starting at $0.60 and going all the way to $1.17, according to optionMONSTER's Heat Seeker system. Open interest in the strike was a mere 62 contracts at the beginning of the day, so these are new positions.
CREE rose 3.57 percent, or exactly $1, on Friday to close at $29.01. Shares of the LED company have been falling since ever since their 2010 highs above $80 as emerging-market economies have slowed. They bounced from below $23 last month and have been moving higher with new products and prospects of Chinese stimulus measures.
The long calls purchased on Friday are already in the money, though the contracts that went for the highest premiums would still need to gain 4 percent by expiration at the end of this week to be profitable. If no rally occurs, the calls will expire worthless. (See our Education section)
Overall option volume in the name totaled 12,215 on Friday, more than 4 times its daily average. Calls outpaced puts by 6 to 1, reflecting the session's bullish bias.
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