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Bear adjusts big Marvell position

Mike Yamamoto (mike.yamamoto@optionmonster.com)

Marvell Technologies has been trying rebound in recent weeks, but one trader is positioning for another pullback.

optionMONSTER's Depth Charge system yesterday detected the sale of about 16,500 September 12 puts for an average price of $0.12 and the purchase of roughly the same number of September 13 puts for about $0.46. Volume was below previous open interest in the 12s but above it in the 13s, indicating that the trader is rolling a long-put position higher.

These puts, which lock in the price where the stock can be sold no matter how far it might fall, are looking for MRVL to drop by the end of next week. The trader is moving the position to a higher level that is in the money , reflecting the recent rise in Marvell's share price, but the new puts will expire worthless if shares are above $13. (See our Education section)

MRVL rose 1.83 percent yesterday to close at $12.80. The chip maker gapped down from the $13 level after announcing quarterly results on Aug. 22 but has been working its way back up since the end of that month.

Total option volume in Marvell was 47,760 contracts yesterday, more than 5 times its daily average for the last month. Overall puts outnumbered calls by 6 to 1.

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