Integrated Device Technology, Inc. (IDTI) is a Silicon Valley designer, manufacturer and distributor of semiconductor technology that operates with a global presence in both the communications and computing sectors. As of this post (12:15PM CST), IDTI is currently trading at 19.85, up 2.16% on the day. The stock has remained in a bullish uptrend since finding support and bouncing off of the 12.00 support level in mid-October on a daily chart. Since then, IDTI has rallied up around 66%, and today ripped to new 52 week highs of 20.15 on the heels of some unusually bullish options flow.
Earlier this morning, at around 11:46AM CST, we saw some very unusual options activity come across the tape that would indicate a buyer placing a large bet on continued upside in IDTI into the coming New Year. The initial unusual activity detected was a purchase of 4,668 of the Jan ’15 20.0 strike calls against an open interest of around 3,800. The major telltale sign of a bullish position being established however, was the fact that these contracts traded at the offer of 1.20, representing an initial purchase price of approximately $560,160 before commissions. This purchase was followed up with another huge block of 5,052 of the same contracts being bought up at 11:53AM CST for 1.35, again lifting the offer and representing a cash outlay of approximately $682,020 before commissions. As of this post, over 11,800 total contracts have traded in the Jan ’15 20.0 strike, mostly on the offer. This would seem to indicate a large bet being made on the bullish continuation in IDTI continuing over the next several weeks, with just over one month until the monthly option expiration on 01/17/2015. I have not yet taken a trade in IDTI, but will be looking to get long this name on the back of this unusually bullish order flow.
Trade: A trader bought the IDTI Jan 20 calls for $1.20
Risk: $120 per 1 lot
Reward: Unlimited
Breakeven: $21.20
These calls traded as high as $1.40 today making this an extremely profitable trade.
Regards,
Andrew Keene
KeeneOnTheMarket.com
