Options Trading News

March 1, 2013  Fri 4:14 AM CT

A last-minute trade yesterday is betting that Informatica will rally by summer.

More than 2,200 June 35 calls were purchased in 4 minutes yesterday, led by a print of 1,800 that went for $3.50, according to optionMONSTER's Heat Seeker tracking system. The volume was 9 times higher than the strike's open interest of just 241 contracts before the session began, clearly showing that this is fresh buying.

INFA rose 0.81 percent yesterday to close at $35.01. Shares of the business-software company gapped up from the $33 level on Jan. 25 with a strong fourth-quarter report but have been drifting lower since then.

The calls purchased yesterday, which lock in the price where traders can buy shares, are looking for INFA to gain at least 10 percent by mid-June. These options could be sold earlier at a profit with any rally before then, but they will lose value as that expiration approaches if the shares don't move. (See our Education section)

Total option volume in the name was 3,571 contracts, 13 times its daily average of just 275 in the last month. Only 2 puts changed hands, a reflection of the session's bullish sentiment.
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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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