Sigma Designs, Inc. (SIGM) Spike Prompts Bullish Betting

Sigma Designs Inc (SIGM) is above $7 for the first time in over two years

Digital Content Group
Dec 31, 2014 at 3:08 PM
facebook twitter linkedin


For the first time in over two years, Sigma Designs Inc (NASDAQ:SIGM) has eclipsed the $7 mark, gaining 11.4% today to perch at $7.14, thanks to a price-target hike to $8 from $7 from Needham (which also reiterated its "buy" opinion). This jump -- which topped out at a new three-year high of $7.34 -- has sparked heavy activity in the stock's options pits.

Overall options volume is running at 20 times the normal intraday rate for SIGM, and calls have been the bets of choice -- outstripping puts by a 100-to-1 margin. Considerable attention has been focused on the February 7.50 call, where 1,263 contracts are on the tape, most of which appear to have been bought to open. These traders expect SIGM to continue its run higher, finishing above $7.50 by the close on Friday, Feb. 20, when the back-month series expires.

Taking a step back, the stock has really picked up steam in the past two months after grinding lower for a few years. In fact, SIGM has outperformed the broader S&P 500 Index (SPX) by 53.5 percentage points in the past 40 sessions.

On the sentiment front, the two analysts covering Sigma Designs Inc (NASDAQ:SIGM) rate it a "buy." Similarly, the equity's consensus 12-month price target sits at $8.00 -- territory not explored since November 2011.

 

If you are not making money with options, you aren’t buying options like this…

There is no options strategy that more perfectly approaches trading the fastest moving and most volatile stocks available in the marketplace than this one. In fact, there is no strategy that better utilizes put options for optimal returns and a real trading edge over other traders in the exact same market. New options traders fail out at an incredible rate without proper trade research, execution timing, and option picking. Capitalize on Schaeffer’s 100+ years of options trading excellence with the most coveted product launch in company history. Don't waste another second... join us right now before the next round of trades are released!

Schaeffer's Investment Research Master Portfolio Trial
 


 


 
Special Offers from Schaeffer's Trading Partners