Options Trading News

January 4, 2013  Fri 10:47 AM CT

Vringo is rebounding at key levels, and one large trader is looking for more gains in the mobile-phone software developer.
Nearly 30,000 VRNG options have traded this morning, compared to a daily average of fewer than 4,000 in the last month. Most of the action is in a three-way call spread.

A trader sold 4,000 January 4 calls for $0.19 against open interest of more than 10,000, according to optionMONSTER systems. At the same time, he or she bought 4,000 May 4.50 calls for $0.66 and sold 4,000 May 8 calls for $0.20 in volume that was above the open interest in both of those strikes, indicating new activity.

This trader is selling the out-of-the money January calls, which expire in two weeks, and using the proceeds to help pay for a new call vertical spread in May. (See our Education section)

VRNG is trading at $3.59, off its morning high of $3.83 but still up 2.57 percent a day after breaking above its 200-day moving average. Shares bounced off support around $2.65 last week and are now back to where they were trading in late November.
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