Market News

November 25, 2016  Fri 6:45 AM CT

At least one investor is positioning for a rebound in Fortinet by spring.

OptionMonster's monitoring system detected the purchase of 2,900 March 34 calls for $1.35 and the sale of 2,900 March 38 calls for $0.35 on Wednesday. Volume was far above open interest in both strikes, showing that these are new positions.

This vertical spread is looking for FTNT to rally above $34 by expiration in mid-March. The sale of the higher-strike contracts reduces the cost of the long calls but limits potential gains, as the trader will be obligated to sell shares if they rise above $38. (See our Education section)

FTNT fell 1 percent to $30.84 on Wednesday and is down 12 percent in the last three months. The cybersecurity company is expected to report earnings after the close on Jan. 26.

Overall option volume was 3 times greater than average. Calls outnumbered puts by a bullish 453-to-1 ratio.

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