Bull looks to ring in new year with H-P
David Russell | email@example.com
optionMONSTER's Heat Seeker monitoring systems detected the purchase of about 20,000 January 24 calls for $1.77 to $1.82 and the sale of a matching number of January 31 calls for $0.33 to $0.35. Volume was above open interest in both strikes.
This call spread is designed to leverage a rebound in the share price. It cost about $1.46 and will earn approximately 379 percent if the tech giant closes at or above $31 on expiration. (See our Education section)
HPQ is down more than 4 percent to $21.87 this afternoon, so that option trader is hoping for a rally of more than 40 percent. The stock is sitting around its lowest price in more than six years, dragged downward by the broader market and a series of bad strategic moves by its directors.
Yesterday the computing giant hired Meg Whitman as its new CEO, but investors apparently want more evidence that a turnaround is taking place before driving shares higher. The other options volume in the name is mostly non-directional with investors selling calls and puts.
The company's next earnings release is scheduled for Nov. 21. Overall option volume is 4 times greater than average so far today.