Options traders are stepping in to buy upside calls in Applied Materials ahead of a press event it is hosting today with solar industry experts.
Yesterday's activity was concentrated mostly the July 10 and July 11 contracts, where more than 9,500 and 12,000 calls have traded respectively with strong buying patterns, according to OptionMonster's tracking systems. Total Applied Materials calls traded at all strikes outnumber puts by more than 11 to 1.
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The chip equipment maker's shares closed yesterday up 1.37 percent on the day to $11.08 but have been falling steadily since their highs earlier in the month. The call buyers may be expecting the stock to break out of its tight trading range of the last couple of months between $10 to $12.
Quarterly earnings released May 13 showed weakness in its the company's solar business, which Applied Materials has touted as key to its growth. Clean energy legislation will be critical to that strategy, and the company is holding an event in Germany today on renewable energy policies.
Najarian owns AMAT calls.