This Day On The Street
Continue to site
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Silicon Motion Bulls Bet on a Bounce

By David Russell, reporter at OptionMonster

NEW YORK ( OptionMonster) -- Silicon Motion Technology (SIMO - Get Report) has been pulling back from a monster run, and the bulls are stepping in.

OptionMonster's real-time tracking systems detected the purchase of almost 5,000 February 20 calls Wednesday against open interest of just 689 contracts. Most of them traded for 75 cents to 80 cents.

These calls lock in the price investors must pay to buy shares, so they can generate major leverage if the stock moves in the right direction. But the options can also lose all their value if a rally doesn't occur before they expire at the end of next week.

Silicon Motion's shares rose 1.79% to $19.30 Wednesday, down from an intraday high of $20.45. The provider of mobile chips more than doubled last year amid repeatedly strong earnings reports. It beat estimates again last week, prompting management to issue guidance above analysts' expectations.

The stock tried to rally but then rolled over as investors took profits, falling from about $24 to $19. Wednesday's option activity suggested that some buyers are now returning to the name.

ore than 8,300 contracts traded in total, compared with the average of about 500 in a session. Overall calls at all strikes outnumbered puts by 10 to 1.

Russell has no positions in SIMO.

This commentary comes from an independent investor or market observer as part of TheStreet guest contributor program. The views expressed are those of the author and do not necessarily represent the views of TheStreet or its management.

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
SYM TRADE IT LAST %CHG
SIMO $30.71 0.00%
AAPL $132.54 0.00%
FB $80.54 0.00%
GOOG $540.11 0.00%
TSLA $247.73 0.00%

Markets

DOW 18,232.02 -53.72 -0.29%
S&P 500 2,126.06 -4.76 -0.22%
NASDAQ 5,089.3620 -1.4320 -0.03%

Partners Compare Online Brokers

Free Reports