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September 25, 2012  Tue 12:20 PM CT

The bulls think Activision Blizzard is ready to start moving after doing nothing for years.

optionMONSTER's Heat Seeker monitoring program detected a giant three-way strategy in the videogame maker: 30,000 February 15 calls were purchased for $0.12 and 15,000 February calls were bought for $0.50. The investor partially financed the positions by selling 15,000 October 10 puts for $0.21.

He or she paid $795,000 and is now highly leveraged to a rally in the share price because of the large number of calls owned. The trader will also be forced to buy shares for $10 if they fall below that level on expiration but may feel comfortable taking that risk because it's repeatedly provided support. (See our Education section)

ATVI is down 2.24 percent to $11.79 in afternoon trading but has fluctuated in a sideways range for the last three years. Sentiment has been negative toward the industry as gamers shift to the Internet, but in recent quarters the legacy companies have started to adapt.

Activision's last earnings report in August beat expectations as management raised guidance. Electronic Arts also predicted that sales of digital downloads were poised to surpass traditional boxed games.

Overall option volume in ATVI is 24 times greater than average so far today, according to the Heat Seeker.
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