CREE Jumps on Renewed Takeover Chatter

Shares of Cree, Inc.

are popping this morning by 2.14%, trading at $68.06. There has been some chatter in trading circles that the company may receive a takeout bid soon, though this chatter has been recycled many times over during the past 8 months. Options traders aren't taking any chances and are bidding up the calls, namely in the front month. The January 2011 $62.50 and $65.00 strikes are seeing the heaviest volume, followed closely by the $75.00 strike. Within the first 20 minutes of trading over 6,000 calls have traded versus only 800 puts. This call activity is roughly equal to the entire daily average. Cree, Inc. develops and manufactures semiconductor materials and devices primarily based on silicon carbide, gallium nitride and related compounds. It focuses its expertise in SiC and GaN on light emitting diode products.