Short-Term Bulls Eye Rallying Broadcom Corporation (BRCM)

Call buyers expect Broadcom Corporation to hit multi-year highs within the next two weeks

by

Published on Nov 13, 2014 at 10:39 AM
Updated on Apr 20, 2015 at 5:32 PM

Broadcom Corporation (NASDAQ:BRCM) has rallied 2.7% out of the gate to hover near $42.25, and hit a fresh three-year peak of $42.44 just moments ago, after receiving an upgrade to "buy" from "neutral" at Goldman Sachs -- which also lifted its price target to $48 from $40. Option traders are responding, too, with calls crossing at five times the expected intraday rate, and the stock's 30-day at-the-money implied volatility (IV) has spiked 3.3% to 23.8% -- signaling elevated demand for short-term strikes.

Getting into the details, BRCM's weekly 11/28 42.50-strike call is most active, with 2,442 contracts on the tape. The majority have traded at the ask price, IV is edging higher, and volume outstrips open interest. In short, it's safe to assume bullish bets are being bought to open -- a theory confirmed by data from Trade-Alert. What's more, the November 43 call is seeing similar buy-to-open activity.

In a nutshell, today's call buyers are expecting BRCM shares to rally past $42.50 and $43 by the options' respective expiration dates, at the end of this week and next week. This would place the stock deeper into multi-year-high territory.

Elsewhere, Broadcom Corporation (NASDAQ:BRCM) announced plans to build a new corporate campus in Irvine, California. Initially, the campus will be approximately 1.1 million square feet, with the ability to expand to 2 million square feet.


A Schaeffer's exclusive!

The Expert's Guide

Access your FREE trading earning announcements before it's too late!


 
 

Partnercenter


NEW! Explore Schaeffer’s Partners' deals and get connected to top online brokerages with deals tailored exclusively for our readers.  Get answers to your questions regarding transfer fees, commission rates, programs and available discounts related to online trading services.

MORE | MARKETstories


Legendary Stock-Picker Calls Top Stock of 2020
Matt McCall's picks were met with disbelief... Until five soared over 1,000%. Get his latest 2020 pick.
Patent Lawsuit Loss Sends AMRN Stock Spiraling
Amarin just lost a major U.S. patent lawsuit for its heart drug Vascepa
RH Stock Sinks Despite Earnings Beat
J.P. Morgan Securities and Cowen and Company cut their price targets
The Latest Investor's Guide to Precious Metals
Learn how to protect savings and maximize returns by investing in precious metals.