Options Trading News

June 27, 2013  Thu 3:47 AM CT

One trader is betting that Concur Technologies will rally near all-time highs in the next two months.

optionMONSTER's Heat Seeker system shows that 1,600 August 80 calls were bought for $3.80 to $4 in the final hour of yesterday's session. This is clearly a new position, as open interest in the strike was just 609 contracts before the trade appeared.

These long calls, which lock in the purchase price for the stock, are looking for CNQR to gain roughly 5.5 percent or more by mid-August. The options could be sold earlier at a profit if the premiums rise with a rally before then, but the contracts will expire worthless if shares remain below the $80 strike price. (See our Education section)

Shares of Concur, which provides cloud-based management of travel billing and expenses for companies, rose 2.29 percent yesterday to close at $79.52. CNQR surged to a lifetime high of $84.86 after earnings results in early May but had been trending lower until bouncing at $77 on Monday, and the stock is now back above its 50-day moving average.

Total option volume in the name was more than 16 times its daily average for the last month. Calls outnumbered puts by 8 to 1, a reflection of the bullish sentiment.
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The covered call and unhedged risk

I have written a few things on the Covered Call Strategy over the last two weeks. Please understand that those two previous articles plus this one do not constitute a proper, fully in-depth lesson on the Covered Call Strategy like we have in our classes at Option Monster Education. I have picked out a few topics that I believe were worth noting and today I am going to add the final one.

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