Giant call sale hits Applied Materials

Applied Materials has been rallying, but one investor is taking the other side of the trade.

optionMONSTER's tracking systems detected the sale of about 35,000 January 12.50 calls for $0.33. Volume exceeded the previous open interest in the strike, indicating that a new position was opened.

Writing calls locks in the price at which the trader must sell the maker of semiconductor equipment. It's normally done by investors who own stock and want to receive some cash now to reduce their risk. (See our Education section)

In the case of yesterday's transaction, the trader must unload shares for $12.50. Including the credit received, the exit price would be $12.85--a level not seen since late March.

AMAT rose 0.53 percent to $11.28, but at one point was up more than 2 percent. The stock is back around the same level where it stalled a month ago, which could be leading some traders to think that resistance will remain in place.

The trade pushed total option volume in the name to 9 times greater than average. The company's next earnings report is scheduled for after the bell on Wednesday, Aug. 15.

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