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Bulls Back for More in Altera

By Mike Yamamoto of OptionMonster
NEW YORK -- Altera (ALTR) attracted upside option action Wednesday for the second session in a row.
OptionMonster's tracking systems identified heavy buying in the June 35 calls, which traded more than 7,500 contracts for $1.25 to $1.45 Wednesday. The volume was far above the strike's previous open interest of just 546 options, clearly indicating that new positions were established.
These long calls lock in the price where the stock can be purchased through mid-June no matter how far it might climb. They could be sold earlier at a profit if premiums rise with a rally before then, but the contracts will expire worthless if shares remain below $35.
Altera's shares rose 1.92% Wednesday to close at $32.97 after trading as high as $33.28 in the afternoon. The chipmaker fell after issuing a weak outlook last week but then bounced quickly at the $32 level.
Total option volume in Altera was just shy of 15,000 contracts Wednesday -- triple its daily average for the last month -- with overall calls outnumbering puts by a bullish 7-to-1 ratio. The June trades followed call buying in the March 31 strike on Tuesday.
Yamamoto has no positions in ALTR.

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.

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