OptionsHouse

Options Trading News

October 2, 2013  Wed 9:22 AM CT

FTNT: SEE CHART GET CHAIN FIND STRATEGIES
Fortinet has been trying to rally, and the bulls are looking for the next leg higher.

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.
Share this article with your friends


Related Stories

FTNT

Cramer: No time for skinny dipping

July 24, 2015

Down days are like when the tide goes out, and you can see who's swimming naked. The stocks that have the Speedos on are cybersecurity, athletic apparel, housing, drones, and defense.

Invest Like a Monster - San Antonio: October 9-10

TRADING WEEKLY OPTIONS

The fastest money in the market
View full report »

Premium Services

Archived Webinar

Education & Strategy

Options Academy: At the Break

So far, my articles have taken you through a logical progression of option theory and fundamental concepts of options. As of yet, I have not mentioned a single strategy and for a good reason! The actual application of a strategy should come AFTER you learn about the option product itself.

View more education articles »