This Day On The Street
Continue to site right-arrow
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
TheStreet Open House

Takeover Hopes Draw Bulls to MIPS

Stocks in this article: MIPS

By David Russell, reporter at OptionMonster

NEW YORK -- MIPS Technologies (MIPS) wants to be acquired, and the bulls jumped into the name Tuesday.

The stock rallied last Thursday after hiring Goldman Sachs to find a buyer, followed by a pause in the next two sessions. OptionMonster's tracking systems detected heavy activity in the July 7 calls, with more than 3,600 contracts trading against previous positioning of just 1,173. Most of the large blocks were purchased early for 75 cents and 80 cents.

MIPS started to climb shortly after the option activity and ended the session up 11% to $6.97. The company, which provides designs for home-electronics devices like DVD players and TV set-top boxes, lost more than two-thirds of its value last year and has been basing out since August. It is scheduled to post earnings results after the close on April 26.

Tuesday's calls fix the price the trader must pay to buy the stock, so they can appreciate rapidly if MIPS rallies. For instance, the contracts ended the session valued at more than $1, representing a gain of more than 20%. The risk of options is that, unlike the shares themselves, they can lose all of their value if the stock fails to move in the right direction.

More than 6,000 MIPS contracts traded overall Tuesday. Calls outnumbered puts by more than 30 to 1, a reflection of the bullish sentiment.

Russell has no positions in MIPS.

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

Jim Cramer and Stephanie Link 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

Jim Cramer's protégé, David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
Try it NOW
Try it NOW
Try it NOW

Check Out Our Best Services for Investors

Dividend Stock Advisor

Jim Cramer's protégé, 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
Try it NOW
Try it NOW
Try it NOW
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!

Markets

DOW 17,416.85 +225.48 1.31%
S&P 500 2,021.25 +19.09 0.95%
NASDAQ 4,683.4070 +45.4130 0.98%

Partners Compare Online Brokers

Free Reports

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters