Call buyer betting on rebound in Altera


Altera is rebounding at a key level, and one large trader is betting that the chip maker has more room to run in the next four months.

optionMONSTER's Heat Seeker system shows that 5,500 September 37 calls were purchased about 1 minute this morning, led by a print of 4,398 that went for $0.97. This is clearly fresh buying, as open interest in the strike was just 185 contracts before the trade appeared.

ALTR is up 1.66 percent to $33.75 this morning, rising back above its 50-day moving average for the first time since the beginning of April. Shares had been falling since mid-February but rebounded at long-term support around $31 last month.

Today's call buying, which locks in the purchase price for the shares no matter how far they might rise, are looking for ALTR to rally roughly 13 percent or more by mid-September. These options could be sold at a profit earlier if premiums rise with any rally before then, but they will expire worthless if the stock doesn't move in that time.  

Total option volume in the name has already exceeded 10,200 contracts today, nearly quadruple its full-session average in the last month. Only 205 puts have changed hands, a reflection of the bullish sentiment.

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