On July 23 we wrote about a large call buyer hitting Atmel Corporation (ATML) calls that day. The trader had bought 8,041 of the August $9.00 ATML calls paying 50 cents for those calls.
On July 23 Atmel Corporation (ATML) was trading at $8.97. Today is trading at $8.50 up 13 cents, after fading lower since the that large call buy on the 23rd. At this moment, ATML August $9 calls are bidding 20 cents, so the trader is down more than 50 percent on is “bet”, at least on paper. So was this a losing trade? Not yet.
Atmel Corporation (ATML) is scheduled to report earnings on August 6th, after the close. There’s been no upgrades since the 23rd, so that could still be a possibility too, but we think this unusual trade was based on some positive earnings numbers leaking to the lucky few.
That initial trader plopped down $400,000 for a reason. Likely an earnings related reason. While we still don’t like earnings plays, we are jumping in here at 25 cents, in a small way. It’s always nice to copy cat the insider money trades for far less than they paid.
This is not a recommendation, do your own DD in the company and decide for yourself whether this is right for you.