OptionsHouse

Options Trading News

November 29, 2012  Thu 12:20 PM CT

ORCL: SEE CHART GET CHAIN FIND STRATEGIES
Oracle leapt at the open today, and option traders followed up by piling into the name.

optionMONSTER's Heat Seeker monitoring program detected the purchase of about 21,00 June 35 calls against open interest of 276 contracts. Most of the large blocks priced for $1.03 to $1.05.

Those long calls lock in the price where investors can buy shares in the maker of enterprise software. If it continues to climb, the contracts stand to inflate in value and generate significant leverage compared with the underlying stock price. (See our Education section for more on how options can be used to take positions more cheaply than by using common equity.)

ORCL is up 0.61 percent to $32 in afternoon trading. Shares have been pulling back since early 2011, but the stock has been trying to climb since the summer and is now finding support above its 200-day moving average. That could make some chart watchers expect further gains.

Total option volume is more than triple the daily average so far today, with calls dominating the activity. The puts that do trade are mostly sold, which reflects a belief that downside is limited.
Share this article with your friends


Related Stories

ORCL

What's behind Oracle put buying

June 19, 2015

The database maker gapped down after earnings and revenues missed estimates Wednesday evening, and a large trade is positioning for more downside potential.

Invest Like a Monster - San Antonio: October 9-10

Premium Services

Education & Strategy

Real vs. Synthetic

We now know that there are two ways of creating a call position, a put position, and a stock position. We can simply use the actual real security or we can recreate it synthetically. We can create these positions in both long and short forms and this ability sets up an interesting scenario--an arbitrage!

View more education articles »