Fortinet bulls look for more upside
David Russell | [email protected]
optionMONSTER's Heat Seeker monitoring system detected the purchase of 3,000 December 20 calls for $2.30 and the sale of an equal number of December 26 calls for $0.35. Volume surpassed open interest at each strike, indicating that new money was put to work.
Known as a bullish call spread, the trade cost $1.95 and will expand to $6 if the network-security stock closes at or above $26 on expiration. That's a potential profit of 208 percent from a move of a less than 25 percent in the underlying share price. (See our Education section for more on how to generate leverage with options.)
FTNT is up 0.67 percent to $20.99 in morning trading. It touched a 52-week low of $16.47 in June but then started rallying as expectations of its results improved. Shares were back above $20 by July and have been mostly holding their ground since.
They peaked around $28 last year, so today's trade is looking for a push back to the top of that range. Earnings will come out later this month, though the date hasn't yet been announced, so the investor is betting on a good report.
Total option volume is more than twice the daily average in the name so far, according to Heat Seeker. Calls outnumber puts by a bullish 54-to-1 ratio.