TIF, MRVL Options – Unusual Trading Activity – November 24, 2014
This week we’re taking a look at unusual options trading activity in Tiffany (TIF) and Marvell Technology Group (MRVL).
As many of you know, unusual options volume can be a valuable indicator as to what traders are thinking, and more importantly, where these stocks are heading in the short-term.
This is something professional options traders pay a lot of attention to, and for good reason… Unusual options activity can “tip off” big moves in a stock, either up or down.
So let’s take a look at some ‘interesting’ activity that caught our eye this week:
Tiffany (TIF)
Judging by recent options action, luxury jewelry maker TIF could be on the rise.
TIF is currently trading for $103.50. The price is 31% above the 52-week low of $79.09 and is just 2% below the 52-week high of $105.26.
Today, a trader sold over 12,000 January 110 calls for $2.12. Low open interest shows this to be an opening trade. Given the scenario, the calls were almost definitely sold against long stock to create a covered-call strategy.
When using covered calls, the strategist expects the stock to go up, but not beyond the strike price. In this case, TIF is expected to climb to $110 by January expiration, but no higher. That’s still nearly $5 above the 52-week high, so it’s definitely a bullish view.
Marvell Technology Group (MRVL)
Semiconductor company MRVL could be in for a move higher over the long-term.
MRVL is trading for $13.85. The shares are 16% below the 52-week high of $16.52 and 19% above the 52-week low of $11.65.
At the end of last week, someone purchased 3,500 calls in January 2016 at the 15 strike. The price was roughly $1.67 per contract. It was opening action.
The trader clearly believes MRVL is headed higher, but is willing to pay for time. The stock would need to be at $16.67 or higher for the trade to make money. However, we’re talking about over a full year before expiration hits.
More Options Ideas…
That wraps up this week’s unusual options trading and volume…
Keep in mind, there’s a lot more unusual options activity going on than what we discuss here.
We just try to bring you what we feel are the most significant ones– and the ones you might actually be able to make some money on!
So keep an eye on your email inbox… we have a lot more options trading ideas coming your way!
Yours in Profit,
Gordon Lewis
Category: Unusual Options Trading Activity
