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Semiconductor HOLDRS Trust (SMH)Shares of the Semiconductor HOLDRS Trust, which issues depository receipts called Semiconductor HOLDRS that represent an undivided beneficial ownership in the U.S.-traded common stock of companies that develop, manufacture, and market semiconductors, fell 0.45% to touch down at an intraday low of $28.01 in morning trading. However, as the trading day progressed, shares of the fund clawed their way back up to rally 0.50% to $28.59 as of 11:35 am (ET). Bullish options strategists dominated trading activity observed on the fund thus far today. Investors expecting to see continued upward momentum in shares of the SMH purchased 1,200 calls at the July $29 strike for an average premium of $0.62 apiece. Call buyers at this strike price make money if the fund’s share price increases 3.60% to trade above the average breakeven point of $29.62. Meanwhile, other optimistic individuals picked up 1,300 calls at the higher July $30 strike for an average premium of $0.29 per contract. These higher-strike call coveters accumulate profits as long as shares of the Semiconductors HOLDRS Trust surge 5.95% over the current price of $28.59 to breach the effective breakeven point at $30.29 ahead of July expiration day.

Oracle Corp. (ORCL) The world’s second-largest software maker attracted call buying options investors in the first half of the trading session despite the 0.75% decline in the price of its shares to $23.03. Oracle’s shares are perhaps weaker on news the firm faces a lawsuit initiated by a whistleblower and the U.S. Justice Department alleging the software company overcharged the government by tens of millions of dollars. Options activity on the stock, however, was dominated by investors positioning for a rebound in Oracle’s share price by July expiration. It looks like optimists purchased some 5,000 calls at the July $24 strike for an average premium of $0.34 per contract. Call buyers at this strike price are poised to profit as long as ORCL shares rally 5.7% to exceed the average breakeven point to the upside at $24.34 by expiration day next month.

Fuqi International, Inc. (OTCPK:FUQI)Shares of the designer of high quality precious metal jewelry in China are up 5.25% to stand at $9.40 as of 11:15 am (ET) after earlier rallying as much as 10.75% to touch an intraday high of $9.89. The sharp increase in the price of FUQI shares inspired some optimistic options traders to pick up roughly 2,400 calls at the July $10 strike for an average premium of $0.65 per contract. Investors long the calls make money as long as Fuqi International’s shares increase 13.3% over the current price of $9.40 to surpass the average breakeven price of $10.65 by July expiration.

Somanetics Corp. (SMTS)News that medical equipment manufacturer, Covidien PLC, agreed to purchase Somanetics Corp. for $25.00 a share in cash sent Somanetics’ shares flying 31.5% higher this morning to an intraday and new 52-week high of $24.86. One bullish options trader opted to sell short 1,450 puts at the November $22.5 strike to pocket premium of $0.05 per contract. The investor keeps the full $0.05 premium received on the sale as long as Somanetics’ shares trade above $22.50 through November expiration.

Source: Wednesday Options Brief: SMH, ORCL, FUQI & SMTS