Options Trading News

October 31, 2013  Thu 4:14 AM CT

Bruker is seeing bullish option trades before it reports earnings tomorrow.

More than 3,900 March 22.50 calls were bought yesterday for $1.15 to $1.25, according to optionMONSTER's Heat Seeker tracking system. These are clearly new positions, as open interest in the strike was a mere 85 contracts before the trades appeared.

These long calls lock in the price where the stock can be bought through mid-March no matter how far it might climb. They could be sold earlier if premiums rise with a rally before then, but the contracts will expire worthless if shares remain below $22.50. (See our Education section)

BRKR rose 1.05 percent to $20.70 yesterday. The stock pulled back after hitting a two-year high of $21.33 early this month but has been trading sideways since then, tracking its 50-day moving average.

The company, which makes scientific instruments and imaging systems, is scheduled to release third-quarter results tomorrow before the market opens.

Total option volume in the name topped 4,200 contracts yesterday, 29 times its daily average for the last month. Overall calls outnumbered puts by more than 15 to 1, a reflection of the session's bullish sentiment.
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As I stated in last week's article, a break out or a break down needs to have a couple things happen before it is considered a confirmed break out or break down. The only problem is that in today's market where things move much more quicker than they did just a few years ago, two days could wind up being the majority of the expected movement, if not the whole movement.

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