ARM Holdings has pulled back sharply after a massive run, but bullish option traders came back to the U.K. chip maker last week.
More than 4,000 July 35 calls traded in a strong buying pattern on Friday for premiums ranging from $1.78 and $2.10, according to OptionMonster Heat Seeker tracking system. These are clearly new positions, as the open interest in the strike was just 47 contracts before the session began.
These calls, which lock in the price where traders can buy the stock, are betting that ARMH will gain roughly 6 percent in the next month. But they will rapidly lose value if the shares don't rally in coming weeks.