Calls are bullish on Xilinx before earnings
Xilinx is attracting upside option activity ahead of quarterly results tomorrow afternoon.
optionMONSTER's monitoring program shows that 3,400 September 55 calls were purchased for $0.20 to $0.27 yesterday. Volume surpassed open interest of 795 contracts, an indication that new money was put to work.
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)
XLNX rose 0.21 percent to $48.45 yesterday and is up 5 percent in the last three months. The chip maker is scheduled to report earnings after the close tomorrow.
Overall option volume was twice the daily average. Calls outnumbered puts by a bullish 56-to-1 ratio.
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