Marvell Technology Group Ltd. (MRVL) Bulls Target Multi-Year Highs

Call buyers have set their sights on Marvell Technology Group Ltd. (MRVL)

Mar 6, 2015 at 11:47 AM
facebook twitter linkedin

Call buyers have been flooding Marvell Technology Group Ltd.'s (NASDAQ:MRVL) options pits in recent months. At the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), for example, the equity's 50-day call/put volume ratio of 6.60 ranks in the 71st annual percentile. In other words, calls have been bought to open over puts at a faster-than-usual clip.

Echoing this call-skewed bias is MRVL's Schaeffer's put/call open interest ratio (SOIR) of 0.18. Not only does this show that call open interest outweighs put open interest by a more than 5-to-1 ratio among options set to expire in three months or less, but it ranks lower than 91% of similar readings taken in the past year. Simply stated, short-term speculators have rarely been as call-heavy as they are now toward the security.

It's a similar backdrop in today's trading, with calls crossing the tape at 1.5 times what's typically seen at this point in the day, and outpacing puts by a more than 17-to-1 margin. Receiving notable attention is the stock's March 17 call, where it appears a number of positions are being bought to open. By initiating the long calls, traders expect MRVL to topple $17 -- a feat not accomplished in four years -- by the close on Friday, March 20, when front-month options expire.

This upbeat outlook isn't too surprising, given MRVL's recent flexing of technical muscle. Since hitting an annual low of $11.65 in mid-October, the equity has rallied 42% -- and hit a multi-year peak in February -- to trade at $16.53. What's more, the brokerage bunch is beginning to share in this optimism. Specifically, Susquehanna this morning raised its price target on Marvell Technology Group Ltd. (NASDAQ:MRVL) by $6 to $20, and upped its rating to "positive" from "neutral," expressing confidence in the company's ability to find a strategic alternative for its handset division.


Minimize Risk While Maximizing Profits

There is no options strategy like this one, which consistently minimizes risk while maintaining maximum profits. Perfect for traders looking for ways to control risk, reduce losses, and increase the likelihood of success when trading calls and puts. The Schaeffer’s team has over 41 years of options trading success targeting +100% gains on every trade. Rest assured your losses are effectively limited to your initial cost at the time of making your move! Don't waste another second... join us right now before the next trade is released! 


300x250 - Banner 3 - v1