Marvell Tech (MRVL) loses 58 cents to $15.47 on earnings news and one strategist apparently sees the weakness as an opportunity — 5000 Jan 12.5 puts were sold on the chipmaker at $1 to buy 5,000 Jan 17.5 – 22.5 call spreads for $1.05. The three-way traded on ISE, where data confirm puts were sold to buy the call spread, to open. Separately, Mar 16 calls on the stock are seeing active trading. Volume is approaching 10,000, but the action has been in smaller lots. The top trade is 375 for 46 cents when the market was 43 to 48 cents. It’s possible that closing action is driving the flow, as open interest in the Mar 16s is 15,811 and the 2nd biggest position in MRVL behind Mar 17 calls (which have 18,774 in OI). Meanwhile, post-earnings crush is sending levels of implied volatility in MRVL options down 21 percent to 31.5.
About the Author (Author Profile)
Frederic Ruffy is a well-known trader, writer, and strategist who has spent years educating investors and creating intelligent, insightful, unbiased market observations that are frequently cited by the Wall Street Journal and other financial publications. As senior analyst, Fred provides frequent and regular notes and daily updates for activity of interest.