Broadcom Corporation (BRCM) M&A Hopes Spark Options Frenzy

Broadcom Corporation (BRCM) options are in demand amid buyout hopes

May 27, 2015 at 2:46 PM
facebook twitter linkedin


While a handful of semiconductor stocks are comfortably higher this afternoon, Broadcom Corporation (NASDAQ:BRCM) has left its sector peers in the dust. The security just catapulted to a 14-year high of $56.40 -- and was last seen 16.7% higher at $54.78 -- amid reports that Avago Technologies Ltd (NASDAQ:AVGO) is in talks to buy the firm. Against this backdrop, BRCM calls are flying off the shelves at a rapid-fire rate. 

Specifically, BRCM has seen roughly 51,000 calls cross the tape -- more than five times the intraday norm, and about five times the number of puts exchanged. It looks like bulls are buying to open 55-strike calls in both the weekly 5/29, June, and July series, gambling on an extended climb north of $55 in the near term. What's more, the equity's 30-day at-the-money implied volatility has more than doubled to 54.6% -- an annual high. 

Even before today's M&A surge -- which echoes that of Juniper Networks, Inc. (NYSE:JNPR) -- Broadcom Corporation (NASDAQ:BRCM) option traders were betting bullishly. On the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), the equity's 10-day call/put volume ratio of 8.41 stands higher than 86% of all other readings from the past year.

 

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 JULY STOCKS REPORT AD
 


 


 
Special Offers from Schaeffer's Trading Partners