RF Micro Devices has seen a lot of volatility over the last few years, and one trader sees more of it in the next few days for the semiconductor company.
RF Micro closed yesterday off 0.63 percent to $4.72, and one trader expects the shares to fall further by Friday's expiration. OptionMonster's tracking systemsshow the purchase of 4,900 of the October 5 puts for $0.40.
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This volume is twice the open interest, indicating newly opened positions. The 20-day average total options volume for RF Micro has been just 1,497.
Shares only have to drop to $4.60 to make these puts profitable. The price was below that on Oct. 2 and as high as $5.85 a month ago, so a $0.12 move doesn't seem out of the question.
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Chris McKhann is an analyst and writer for OptionMonster.