With two weeks to go before semiconductor company LSI (NYSE: LSI) announces second-quarter earnings figures, an investor significantly boosted call volume in a roll-out.
The investor sold to close 31,000 July 5 calls and simultaneously bought to open 31,000 Oct. 5 calls Wednesday. The July 5 calls had a volume weighted average price (VWAP) of $0.0625, and the VWAP of the Oct. 5 calls was $0.5615. The July 5 calls climbed 10 cents and are home to open interest of 35,600 contracts. The Oct. 5 calls gained seven cents Thursday and are home to open interest of 4,800 contracts. The investor isn’t yet finished with LSI, and is moving his soon-to-expire July contracts out to a later-dated series.
Normal daily volume in LSI rarely exceeds 6,000 options, but this roll-out helped boost Wednesday’s volume to 73,000 contracts across all strikes. We saw few puts change hands, but the bulk of the volume accumulated in the July 5 and Oct. 5 strikes.
LSI stock has rallied more than 110% since reaching a 52-week low of $2.45 on March 9. The investor is not necessarily looking for a significant rally, but needs these shares to expire higher than $5.60 in the August expiration month. LSI shares closed up 23 cents to $5.21.
Rolling options activity does not mean investors should stock up on LSI shares, but we could see more call buying activity if the company’s earnings beat analysts' estimates again (the company reported a three-cent loss versus expectations for a four-cent loss last quarter).
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