Marvell Technology Group Ltd. (MRVL) Bulls Eye Four-Year Highs

Marvell Technology Group Ltd. (MRVL) hasn't traded above $18 since March 2011


Published on Mar 12, 2015 at 7:57 AM
Updated on Apr 20, 2015 at 5:09 PM

Marvell Technology Group Ltd. (NASDAQ:MRVL) calls have been flying off the shelves of late. During the past two weeks at the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), the stock has seen more than 20,600 calls bought to open versus roughly 300 puts. The resultant 10-day call/put volume ratio of 67.47 registers just 2 percentage points from an annual peak.

This trend continued yesterday, with MRVL calls crossing at nearly 1.6 times the usual daily pace. Also, the equity's 30-day at-the-money implied volatility spiked 7.3% to 35.9%, hinting at increased demand for short-term strikes.

Along those lines, MRVL's April 18 call saw the most action, with more than 7,800 contracts changing hands. It appears the majority of these positions were bought to open, as speculators rolled the dice on additional upside for the shares through April options expiration.

However, Marvell Technology Group Ltd. (NASDAQ:MRVL) has historically struggled around $17, and the last time the shares saw the north side of $18 was roughly four years ago. As such, delta on the out-of-the-money call is 0.22, or 22%. MRVL settled at $16.19 on Wednesday.

Monthly Chart of MRVL since March 2011

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