Amidst the fanfare and media speculation leading up to Apple’s event (which begins at 10 a.m. PT on Tuesday for those keeping track) let’s turn our attention to Utah-based solid state storage manufacturer Fusion-IO (FIO). The company designs and manufacturers a compact, power-saving flash memory type known as NAND. The type of memory used in mobile devices like the iPhone and iPad, as well as countless others.

UNUSUAL OPTIONS ACTION

On Monday, we saw unusual options activity in the form of a buyer of 1,050 FIO Jan 2015 15 Calls for $2.45 (3.9 time usual volume). I first flagged the trade at 9:56 a.m. CST, when the stock was trading around $12.50.

FIO shares would close the session at $13.60, up $2.77 (or about 26 percent). Trading in a 52-week range of $10.38-$32.63, FIO shares are off over 42 percent this year following Monday’s gains. FIO shares received the boost after Western Digital (WDC) announced it would buy Fusion-IO competitor Virident systems for $685 million. Subsequently Fusion-io became rumored to be a target for acquisition by Seagate Technology (STX). Both WDC and STX are formidable players in the hard-disk market, but are scrambling to expand their presence in the solid state market, as PC-demand slows and shifts towards mobile devices.

WHY ALL THE BULLISNESS?

Aside from the call-buying nearly four times usual volume (in a relatively unheard of stock), investors have a few reasons to be bullish on FIO. One such reason is their people: Fusion-io has consistently made headlines for its ambitious acquisition of high profile personnel. In December 2008, the company hired Apple co-founder Steve Wozniak. Jens Saxboe, a Danish developer known for his work with the Linux kernel, subsequently joined in 2010 following a highly successful tenure at Oracle.  Two other prominent Oracle developers followed in 2012, known for their groundbreaking work with the ambitious Btrfs (B-tree file system) that Oracle has been developing since 2007. Btrfs is unique

A second cause for bullish sentiment is Fusion’s acquisition of quality companies. In March, they acquired ID7, a UK-based pioneer of open-source, shared storage systems, for an undisclosed amount. Then in April they announced a $119 million ($5m of which was FIO stock) buyout of NexGen Storage, who specialize in producing hybrid flash-disk storage systems. As part of the deal Fusion-io also brought aboard 50 NexGen employees.

MY TRADE

Buy the FIO Jan 2015 15 Calls for $2.45

Risk: $245 per 1 Lot

Break-even: $17.45

Reward: Theoretically Unlimited

GREEKS OF THIS TRADE

Delta: Long

Gamma: Long

Theta: Short

Vega: Long