Marvell Technology shares jumped along with upside option activity yesterday ahead of the chipmaker's earnings report Thursday after the bell.
OptionMonster's real-time systemsshowed 14,335 March 20 calls trading in unusually large numbers, most of them bought for $0.70 to $0.90. The volume as well over the existing open interest of 9,196 and dwarfed the average daily turnover of 875 calls at that strike for the last month.
Shares closed yesterday up 3.93 percent to $20.08 and crept up another $0.06 in after-hours trading. The stock broke through its 50-day moving average, and there are those who will use such a move to jump in.
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Marvell's new platforms are the first of their kind to offer gigahertz-class processor speed for smartphones, providing computing power once reserved for stationary desktops. There was strong buzz at the recent Mobile World Congress in Barcelona about the companies technologies, which promise to support full-HD 1080p encoding, 3D mobile gaming, full Adobe Flash, Android software, Windows Mobile, and other leading operating systems.
The stock would need to gain roughly 4 percent in the next three weeks for the purchased March 20 calls to turn a profit. Overall calls outnumber puts by about 2.7 to 1.
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Najarian owns MRVL.
Jon 'DRJ' Najarian is a professional investor, CNBC contributor, and cofounder of OptionMonster.com.