Traders are snapping up calls in MEMC Electronic Materials.
Some of the option activity yesterday involved traders rolling upside positions to later months and higher strikes, but it was the naked call buying that drew the most attention on OptionMonster's proprietary tracking systemsdespite no apparent news.
The May 18 calls are well over $3 out of the money, but 8,762 of them changed hands yesterday at nearly 14 times the open interest of just 637 contracts. More than 77 percent of those calls traded in a strong buying pattern, many in large chunks for prices ranging from $0.22 to $0.28.
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Shares of the semiconductor wafer manufacturer closed yesterday at $14.67, down a penny on the session. The stock has enjoyed a nice surge this month but is still churning in a very tight range that has been in place since a drop back in October, and it has been under its 200-day moving average ever since.
Now the 200-day average is just above $15, so the stock will need quite a push for those May 18 calls to peform. The shares, which have not traded above $18 since Sept. 24, would need to gain roughly 24 percent for those options to be profitable.
Overall calls at all strikes in the name outnumbered puts by 3.7 to 1.
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Najarian owns WFR calls.