Options Trading News

July 18, 2013  Thu 10:55 AM CT

Someone apparently thinks that the tide is turning for General Cable, which reports earnings two weeks from now.

optionMONSTER's Heat Seeker monitoring system detected the purchase of 2,000 August 32 calls for $1.40 and the sale of an equal number of August 34 calls for $0.50 this morning. That translates into a cost of $0.90.

The position will inflate to $2, or a profit of 122 percent, if the wire maker closes at or above $34 on expiration. (See our Education section for more on the strategy, known as a bullish call spread.)

BGC is up 2.14 percent to $31.94 in midday trading but has been struggling all year. It declined following its last two earnings reports amid weak revenue growth as other companies in the industry have improved, so today's trader seems to be looking for General Cable to catch up. Its next release is scheduled for Aug. 1.

Total option volume is 19 times greater than average, with calls outnumbering puts by more than 2,000 to 1.
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As I stated in last week's article, a break out or a break down needs to have a couple things happen before it is considered a confirmed break out or break down. The only problem is that in today's market where things move much more quicker than they did just a few years ago, two days could wind up being the majority of the expected movement, if not the whole movement.

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