It's been a sweet week for ON Semiconductor. Buoyed by the announcement Monday of a stock repurchase program, the shares have gained 9 percent since Friday. And options traders believe the stock has a lot more room to run in the weeks ahead.
As ON Semiconductor options traded about 12 times their average daily options on Wednesday, the most popular bet was to buy the January 10-strike calls for about 37 cents.
Since a call grants its owner the right to buy a stock for a given price at a given time, this trade will make money if the stock is above the strike price by more than the amount being spent at January expiration—or above $10.37 on Jan. 16.
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