Himax Technologies was a rare winner among chip makers today, and an upside position opened early this year is paying off.
Way back on Feb. 14, Investitute’s market scanners found that 5,000 January $5 calls were purchased in one print for $1.45 with shares at $5.75. This was clearly a new position, as volume was well above the strike’s open interest of 3,321 contracts.
Today those calls were marked at $3.08, more than doubling in value. The stock gained 40.3 percent in the same period, a huge move but one that was still far below that of the options on a relative basis.
Long calls lock in the price where investors can buy a stock, letting them position for a rally at limited cost with the potential for significant leverage. They carry less risk than owning shares because the most that can be lost is the price of the options no matter how far the stock might fall.
HIMX rose 1.38 percent today to close at $8.07. The Taiwanese semiconductor company has risen recently amid rumors that its 3D sensors will be used in Apple’s iPhone 8.