Bulls want to rock with Pandora
David Russell | [email protected]
optionMONSTER's Heat Seeker monitoring system detected the purchase of 2,600 March 30 calls for $4 to $4.20. Volume was almost 10 times open interest at the strike, indicating that new money was put to work on the long side.
These long calls lock in the price where the online music company can be purchased, letting investors cheaply control upside in the stock. They also can generate significant leverage. For instance a move of 40 percent in the share price will inflate those calls by more than 200 percent. (See our Education section)
P is up 4.1 percent to $27.52 in afternoon trading, just off its all-time high of $27.93 established yesterday. The company has been cited on our InsideOptions Pro service frequently, resulting in several huge winners as bears were forced to cover short bets and earnings surprised to the upside.
The last big move occurred on Sept. 12 after veteran Internet executive and adman Brian McAndrews was hired as chairman and CEO. The timing of the next quarterly release hasn't been disclosed yet, but last year's calendar suggests it will occur in early December.
Overall option volume in the Pandora is still below its full-session average, according to the Heat Seeker, but calls account for 60 percent of the total.