Chip Stock Soars on Sale Rumors
Puts have been quite popular lately on MLNX
While the broader semiconductor sector has had a rough week, Mellanox Technologies, Ltd. (NASDAQ:MLNX) is up today 12.8% in electronic trading, after the company hired a financial adviser to explore a possible sale. The chipmaker has received interest from at least two companies, according to a CNBC report. Should today's price action pan out, MLNX would be one of the top Nasdaq stocks today.
On the charts, MLNX scored a five-year high of $90.45 back on June 20, but has since been carving out a channel of lower highs and lows. The shares recently found support at their 320-day moving average, though, and bounced from this trendline earlier this week in the wake of an upbeat quarterly report. And should today's results hold, MLNX will be on track for its best week since last November.
In the options pits, puts have been popular. The stock's 10-day put/call volume ratio of 0.44 on the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) is higher than 86% of all other readings from the past year, meaning puts have been bought to open relative to calls at a quicker-than-usual clip.
Meanwhile, the security's Schaeffer's put/call open interest ratio (SOIR) of 2.16 ranks in the 100th percentile of its annual range. This indicates that short-term options traders have rarely been more put-heavy toward MLNX in the past 12 months. Peak open interest is found at the November 62.50 and 65 puts, though data from Trade-Alert suggests mostly sell-to-open activity.