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Atmel Corporation (NASDAQ:ATML) call volume is running at about 72 times its average intraday rate so far today, with roughly 30,000 contracts crossing the tape. Most active by far is the January 2014 8-strike call, where more than 24,000 contracts have changed hands -- 86% at the ask price, suggesting they were purchased.
Fewer than 5,000 contracts reside in open interest at this near-the-money strike (ATML shares are currently hovering at $7.76), and implied volatility has skyrocketed, both indicating the creation of new long positions. Also, data from the International Securities Exchange (ISE) and Trade-Alert confirm the initiation of short-term bullish bets.
By purchasing the calls to open, today's traders are anticipating ATML will be hovering north of $8 by the closing bell on Friday, Jan. 17, 2014. If the shares are below the strike at options expiration, then the speculators will part with 100% of the premium paid, assuming they've hung onto the calls. Even then, they'd part with a relatively modest sum, as the stock's Schaeffer's Volatility Index (SVI) of 38% ranks in the 15th percentile of its annual range.
Today's preference for long calls over puts is business as usual in ATML's options pits. At the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), the microcontroller firm has racked up a 50-day call/put volume ratio of 10.63 -- higher than 82% of comparable readings from the past year. In other words, traders have bought to open calls (relative to puts) at an accelerated clip in recent months.
From a technical perspective, Atmel Corporation (NASDAQ:ATML) has added a respectable 18.5% year-to-date -- though that's still considered underperforming compared to the broader market's performance. Also, as Trade-Alert hints at, the shares have been churning between roughly $7 and $8 since May.