Market News

October 14, 2016  Fri 11:07 AM CT

Traders are betting that Brocade Communications will rally by early next year.

optionMONSTER's tracking program detected the purchase of more than 13,500 January 9 calls for $0.56 to $0.64 today. This represents fresh buying, as volume was more than 18 times the strike's open interest.

Long calls lock in the price where investors can buy stock, allowing them to profit from a rally with limited capital at risk. Their cheap cost can also generate significant leverage on a percentage basis if shares move in the right direction. (See our Education section)

BRCD is off a penny to $8.81 in afternoon trading and is down 6 percent in the last week. The networking-technology company is expected to report earnings after the close on Nov. 21.

Overall option volume is 13 times greater than average so far today. Calls outnumber puts by a bullish ratio of more than 1,000 to 1.

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