Sigma Designs, Inc. (SIGM) is a California based semiconductor and chip manufacturer specializing in integrated circuits used for television and home monitoring systems. At the time of this post (2:00PM CST), SIGM is currently trading higher by 15.44% on the day, up to 7.40 after continuing to rip higher off the market open. The stock is currently pressing its 52 week highs which were made on the session, and it appears a large bullish bet detected by OptionHacker earlier this morning both anticipated and expects this recent strength to continue.
At 10:21AM CST OptionHacker detected and flagged a large 885 contract buy-to-open transaction in the Feb ’15 7.5 strike calls that went off at the ask for $0.30. While the open interest in this strike was already at 584, we can still ascertain that this was an opening transaction as the block-buy lifted the offer at the time. Since OptionHacker flagged this unusual activity, the stock has continued to rally higher on the day, up approximately $0.50 in the underlying, leading to nearly a 100% gain already in the options that were bought. We will continue to keep an eye on this position going into the February monthly options expiration, but for the time being it appears bullish sentiment continues to drive this semiconductor name higher.
Trade: A trader bought 885 of the SIGM Feb 7.5 Calls for $0.30
Risk: $30 per 1 lot
Reward: Unlimited
Breakeven: $7.80
These calls have already traded as high as $0.60 on the day meaning a trader could have locked in massive profits in SIGM.
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