Options Trading News

March 1, 2013  Fri 11:49 AM CT

Activision has started 2013 with a bang, but one investor sees little staying power in the move.

optionMONSTER's tracking programs detected the sale of 2,750 April 14 calls for $0.66 and the purchase of an equal number of March 15 calls for $0.12. This suggests that an existing position was closed and rolled from one strike to the other.

The investor probably owns shares in the videogame company and had previously sold the contracts as part of a covered call strategy. He or she then took the unusual step of adjusting the trade to a later expiration, but also lower in price.

That trimmed the exit price on the stock from $15 to $14 but also collected an additional $0.54 of credit. The move essentially reflects a belief that the stock is done rallying, and now they're willing to get their money back. (See our Education section for more on how options can be used to manage trades.)

ATVI is up 0.17 percent to $14.32 in afternoon trading and is up 35 percent so far this year. Most of that rally followed a strong earnings report on Feb. 7, after which it hit its highest level in more than four years. That could make some traders think that it's due for a pause or pullback.
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