U.S. Markets closed

Call buyers keep chipping into Atmel

Mike Yamamoto (mike.yamamoto@optionmonster.com)

Atmel is attracting bullish option activity before the chip maker reports earnings next week.

optionMONSTER's Heat Seeker system detected heavy buying in the August 8 calls on Friday. More than 4,700 of contracts traded, mostly for $0.35 to $0.45, in volume above the previous open interest at the strike.

Traders also bought more than 2,000 August 9 calls for $0.15 to $0.20 and 1,200 August 7 calls for $0.85 to $0.90. Volume was above the open interest in those strikes as well, indicating that these are all new positions.

All of these long calls , which lock in prices where traders can buy the stock, are betting that ATML will rise to various levels in the next month. But they will lose value if the stock doesn't gain enough and could expire worthless if it drops. (See our Education section)

ATML was down a penny on Friday to close at $7.69. The stock had been drifting higher along with its 50-day moving average since dipping below it briefly in late June, but shares have been trading in a tight range for the last week or so. It touched a 52-week high of $8.40 earlier that month.

The company is scheduled to release second-quarter results on July 31 after the close.

Total option volume in the name on Friday was 11,889 contracts, more than 8 times its daily average for the last month. Overall calls outpaced puts by nearly 5 to 1. 

More From optionMONSTER