OptionsHouse

Options Trading News

April 26, 2013  Fri 4:45 AM CT

RVBD: SEE CHART GET CHAIN FIND STRATEGIES
Riverbed Technology is down more than 27 percent this year, but traders were betting on a comeback yesterday ahead of its earnings report on Monday.

More than 9,700 May 15 calls traded in a strong buying pattern yesterday, with the largest blocks going for $0.84 to $0.86, according to optionMONSTER's Heat Seeker system. The volume was above the strike's open interest before the session began, indicating new activity.

RVBD rose 4.6 percent to close at $14.79 yesterday but has lost more than a quarter of its value since starting the 2013 at $20.37. The stock gapped down from that level after a weak earnings report in early February and has been trending lower ever since.

Yesterday's long calls, which lock in the price where traders can buy the stock no matter how far it might climb, are looking for RVBD to gain roughly 7 percent in the next three weeks. But these contracts could expire worthless if the shares remain below the $15 strike price. (See our Education section)

Total option volume in the name surpassed 13,000 contracts yesterday, more than 6 times its daily average for the last month. Calls outnumbered puts by 7 to 1, a reflection of the session's bullish sentiment.

The networking-technology company is scheduled to release first-quarter results after the market closes on Monday.
Share this article with your friends


OptionsHouse

Premium Services

Upcoming Webinar:

Using Options For Income

http://bit.ly/1nY1OKA

Jon Najarian and Adam Mesh of Options Wealth Machine discuss a detailed strategy utilizing credit spreads to generate income, and how any level of trader can use this simple trading technique.

Education & Strategy

Sweet Spot Exceptions

As discussed last week, when using the Stock Replacement Strategy to replace a stock position to trade direction, we want to use an option that has very similar characteristics to the stock. We talked about using the deep in-the-money, 80 to 85 delta option that is similar in the Greeks and has relatively little extrinsic value which tends to work against us in stock directional trading.

View more education articles »