OptionsHouse

Options Trading News

December 18, 2013  Wed 12:20 PM CT

EA: SEE CHART GET CHAIN FIND STRATEGIES
Electronic Arts has pulled back hard, and now the bulls are playing the video-game maker from the long side.

optionMONSTER's Heat Seeker monitoring program detected the purchase of some 5,000 March 25 calls for $1.12 and the sale of an equal number of March 29 calls for $0.32. Volume is more than 7 times open interest at both strikes, indicating that new money was put to work on the long side.

Known as a bullish call spread, the trade cost $0.80 and will expand to $4 if the stock closes at or above $29 on expiration. That would be profit of 257 percent from the shares moving just 28 percent. The game developer hasn't seen $29 since the market collapsed in late 2008. (See our Education section for more on the potential leverage of options.)

EA is up 0.82 percent to $22.93 in afternoon trading. It more than doubled between August 2012 and August 2013, then fell sharply through the beginning of this month. The last earnings report in October beat expectations, but revenue guidance disappointed.

The stock hasn't traded over $28.13 since late 2008, so today's trader is looking for new highs by the spring.
Share this article with your friends


Related Stories

EA

Traders see floor in Electronic Arts

August 24, 2015

Traders are betting on a floor in shares of the video-game developer, which has fallen sharply with the rest of the market in recent days.

OptionsHouse

TRADING WEEKLY OPTIONS

The fastest money in the market
View full report »

Premium Services

Archived Webinar

Education & Strategy

Options Academy: Ron's Risk Calculation--A Real Life Example

It is rare that I get a chance to give a real-life, real-time example in my articles that the readers were not only following but were actually involved in at the time the event is happening. Well, that is where we are right now in our QQQ trade from last week. Let's recap the trade itself.

View more education articles »