Options Trading News

February 13, 2013  Wed 4:47 AM CT

Shares of Riverbed Technology got hammered after its earnings release last week, but traders are looking for a rebound in the next seven months.

More than 5,700 September 18 calls were bought yesterday, led by a block of 4,408 that went for $1.65, optionMONSTER's Heat Seeker tracking system. The open interest in the strike was a mere 26 contracts before trading began, clearly showing that this is new activity.

RVBD slipped 0.56 percent to $16.12 yesterday. The networking-technology company began the year trading above $21 but gapped down last Thursday on disappointing fourth-quarter results, which were attributed to costs related to its $1 billion acquisition of softwar maker Opnet Technologies last October.

Yesterday's long calls, which lock in the price where traders can buy stock, are looking for RVBD to gain roughly 22 percent or more by mid-September. These options could be sold earlier at a profit in the event of a rally, but they will expire worthless if shares remain below the $18 strike price. (See our Education section)

Total option volume in the name exceeded 12,500 contracts yesterday, double its daily average for the last month. Calls outnumbered puts by 3 to 1, a reflection of the session's bullish sentiment.
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