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Bulls playing for fast money in Nvidia

Mike Yamamoto (mike.yamamoto@optionmonster.com)

Nvidia saw long-term call buying earlier this month, and yesterday the bulls came back to look for a very short-term move.

optionMONSTER's Heat Seeker system detected heavy buying in the August 15.50 calls that expire at the end of this week. More than 5,500 contracts traded for $0.02 to $0.06 in volume that was far above the previous open interest of just 440, clearly showing that these are new positions.

Traders were also snapping up the August 14.50 calls as premiums rose from $0.07 to $0.60. More than 4,400 of those calls traded in volume also above open interest at that strike.

These long calls , which lock in the purchase prices for the stock, are looking for a quick pop before expiring a the end of tomorrow's session. But they will rapidly lose value if the shares don't move in a hurry. (See our Education section)

Nvidia also drew large call buying in the January 16 strike on Aug. 1.

NVDA rose 4.23 percent yesterday to close at $15.03, breaking above its 50-day moving average. The graphics-chip maker initially fell after reporting earnings a week ago but quickly rebounded.

Total option volume in Nvidia yesterday topped 42,600 contracts, more than quadruple its daily average for the last month. Overall calls in the name outnumbered puts by 4 to 1.

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