Traders are turning bullish on Himax
Traders are apparently betting on a strong earnings report from Himax Technologies this week.
More than 5,000 March 8 calls were bought for $0.65 today, according to optionMONSTER's Heat Seeker tracking program. The volume was more than double the strike's previous open interest, indicating that new positions were established.
These long calls lock in the price where the stock can be purchased through expiration in mid-March no matter how far it might climb. They could be sold earlier at a profit if premiums rise with a rally before then, providing potentially significant leverage, but the contracts will quickly lose value if shares pull back. (See our Education section)
HIMX is up 3.83 percent to $7.87 in afternoon trading. The chip maker and display-imaging technology company, which is a partner with Google, has been on a roller-coaster ride since hitting an all-time high above $16 last March. This year the stock fell to $7 in mid-January, rebounded to $9.49 two weeks later, then gave up those gains.
The company is scheduled to announce fourth-quarter results on Thursday before the market opens. The name has seen bullish option activity repeatedly toward the end of last year, most recently with December calls that tripled in value .
Total option volume in Himax tops 6,500 contracts, already more than triple its full-session average for the last month. Only 87 puts have traded so far, a reflection of the bullish sentiment.
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