Options Trading News

September 14, 2012  Fri 2:14 AM CT

BMC Software has seen bullish trades in the past, and the activity remained optimistic in yesterday's session.

optionMONSTER's Heat Seeker monitoring system detected the purchase of 3,000 January 45 calls for $2.15 and the sale of an equal number of January 50 calls for $0.65. Volume was more than 20 times open interest at each strike, clearly indicating new activity.

The trade cost $1.50, and will earn a maximum profit of 233 percent if the maker of enterprise software closes at or above $50 on expiration. It's known as a bullish call spread because it leverages a move between two price points, in this case $45 and $50. (See our Education section)

BMC rose 0.68 percent to $42.96 yesterday. It's been fluctuating in a range since early 2012 but has been rallying aggressively since the beginning of August. Some traders also tripled their money in the September calls earlier this month.

Overall option volume was quadruple the daily average in yesterday's session, according to the Heat Seeker. Calls outnumbered puts by 136 to 1.
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I have written a few things on the Covered Call Strategy over the last two weeks. Please understand that those two previous articles plus this one do not constitute a proper, fully in-depth lesson on the Covered Call Strategy like we have in our classes at Option Monster Education. I have picked out a few topics that I believe were worth noting and today I am going to add the final one.

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