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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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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