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GT Advanced Technologies Inc Bulls Bet On a Short-Term Bounce

GT Advanced Technologies Inc's July 15.50 call is being bought to open today

by 7/15/2014 3:09 PM
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It's been a volatile two months for GT Advanced Technologies Inc (NASDAQ:GTAT), with the shares trading as low as $12.74 on May 12, only to rally to a record peak of $20.54 on July 2. Since tagging this most recent milestone, the equity has pulled back sharply, and was last seen churning fractionally lower at $15.26. Today's option traders are keeping the faith, though, purchasing GTAT's front-month calls to bet on a quick bounce by week's end.

Specifically, the stock's July 15.50 call has seen the most action in GTAT's options pits today, with 2,199 contracts on the tape at last check. The majority of these traded at the ask price, and volume outstrips open interest -- two indications of buy-to-open activity. At-expiration breakeven at this Friday's close is $15.89, which is the strike plus the volume-weighted average price of $0.39. Gains are theoretically unlimited with each additional notch north of here, while losses are capped at 100% of the premium paid, should the calls expire out of the money.

Widening the sentiment scope reveals a more skeptical stance toward GT Advanced Technologies Inc's (NASDAQ:GTAT). The equity's 10-day International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) put/call volume ratio of 0.24 ranks in the bearishly skewed 74th percentile of its annual range, and GTAT's short-interest-to-float ratio stands at a lofty 30.6%.


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