Marvell Technology (MRVL) Might Be a UFO!

I found this hammer on the ground that no one else seemed to be able to pick up. I must be really strong! But if it came from the sky, that means it might be a UFO!

I actually traded this one on Friday, but it's moved down a bit more today, so I thought it would be good to discuss it. But first...

What's the Word on the Street?

The market is down today to start the shortened trading week. September is seasonally a week month for the stock market, but that doesn't mean there aren't worthwhile trades.

Bond yields are rising because bond investors believe that the U.S. might need to refund revenue gained from tariffs. That's because on Friday a "federal appeals court rules that most of President Donald Trump's global tariffs are illegal...". All of the tariffs are still in place, but the case is expected to be ruled on by the Supreme Court.

In other news, the major piece of data releasing this week will be the August jobs report due on Friday. We'll have a chance to see how the labor market is doing. And even though the interest rate decision later this month is seemingly a done deal (expected to be a cut), further data releases pertaining to inflation and jobs will affect how aggressive the Federal Reserve will be while cutting rates.

Marvell Technology (MRVL)

What Is It?

Marvell Technology, Inc. engages in the design, development, and sale of integrated circuits. Its products include data processing units, security solutions, automotive, coherent DSP, DCI optical modules, ethernet controllers, ethernet PHYs, ethernet switches, linear driver, PAM DSP, transimpedance amplifiers, fibre channel, HDD, SSD controller, storage accelerators, ASIC, and Marvell government solutions. It operates through the following geographical segments: United States, Singapore, Israel, India, China, and Others. The company was founded by Wei Li Dai and Pantas Sutardja in 1995 and is headquartered in Wilmington, DE. The listed name for MRVL is Marvell Technology, Inc. Common Stock. 

Why Is It a Possible UFO?

Primarily its current share price relative to its fair value and what other option traders expect are the reasons MRVL could be a UFO.

What About Recent News?

MRVL reported earnings last week and was punished by investors because the results didn't live up to the AI hype. Its revenue came in 58% higher from the year before quarter, but still only met expectations instead of beating. The same is true for its adjusted earnings.

Companies have been spending big on AI and the stock market has been lifted by all the hype surrounding the potential of new innovation. But with all that spending comes increased scrutiny by investors. MRVL was caught in the crosshairs, but with how much it was hit in the past couple trading days, I see an opportunity to catch a rebound.

What's the Current Price?

Despite the tech rally so far this year, MRVL has clearly suffered. It's down ~17% in the past month, and ~14% down on the week.

What’s the Fair Value?

I’d first like to emphasize that fair value is subjective. Many analysts at many banks and institutions rate stocks differently and assign fair value in their own unique way. So, what I like to do is take all the recent fair values since the most recent earnings report and average them. In this case…

Since MRVL's most recent earnings report on 08/28/2025, it has received 11 ratings and taking the average, the fair value might be somewhere around: $92.82.

8 ratings are a Buy, 2 are a Hold, and the Morningstar rating is unknown. The lowest price target is $76, while the highest is $122.

What Do Options Traders Expect?

Calls are trading over equidistant Puts, which means traders think there is a chance to the upside. You can see because… forget about the green columns and focus on the red. Notice how on the right side for the $61 Put it says $2.21, it’s $2.61 for the equidistant Call at $66.

The premium (the credit you receive for executing the trade) is currently less for selling Puts, as opposed to selling Calls. Basically because of that, option traders expect the stock to go up, rather than down.

How About Volatility?

The IV rank (the purple line) for MRVL (stock price in blue) is currently hovering around 21.43, which is somewhat low (IV rank goes from 0-100). This makes short strategies (which are what I prefer) less attractive.

What's the Trade?

My preferred trade is a variation of the wheel without the rolling, AKA cash-secured puts. I typically like to target stocks that offer a dividend and are below fair value. 

Why a dividend? If the trade results in assignment and I’m on the hook for X amount of shares, I can at least be satisfied knowing I picked a (hopefully under fair value) company that will pay me a small amount while I run the other side of the trade AKA covered calls.

MRVL does offer a dividend with a yield of 0.38%.

It’s a fairly low-risk strategy (all options trading is risky!), that has a higher probability of success, but requires a higher amount of collateral. 

So if you saw the most recent image above, I already STO (sold to open) 1 contract of the $61 Put for the October 3rd expiration. I like to have a DTE (Days To Expiration) that is around ~45 days.

When the trade reaches 50% profit I will buy it back. I don’t like to be greedy and go for more profit, because I would rather not waste my time being in a trade for too long.

What About Alternative Trade Ideas?

1. If the collateral requirement is too high, another idea is a put credit spread. You would sell a put at a strike below the current share price and then buy a put at a lower strike than the put you sold. By doing so, you will avoid the collateral requirement of a cash-secured put, but the credit received will be smaller. Also, if the trade goes sideways, you will not be assigned shares so no collecting dividends and running covered calls afterwards.
2. Just invest! 1 share or even fractional shares are a way to get a foothold in a stock that you think might increase in value.

Wait…Where Are the Candlesticks? And All the Other Indicators?

I know many traders love their candlesticks and a ton of indicators. I prefer simplicity. Candlesticks aren’t necessary unless you’re the kind of trader that wants to try and pick the perfect moment to execute a trade, and even then it’s not a sure thing. 

As for indicators, there are a ton. Some of them work sometimes. None are perfect. I don’t want to get bogged down with too many. You’ll drive yourself crazy looking at too many of them, so find a handful you like and stick with those.

Disclosures

• I currently have an open trade with MRVL (as mentioned in this post).
• No trade is a sure thing. There is always risk involved. 
• This blog post is not meant to take the place of financial advice, but hopefully acts as a guide for learning or informational purposes.