Options Trading News

December 19, 2012  Wed 4:14 AM CT

Shares of Apollo Group appear to have found a support level after losing about 60 percent of their value this year, and long-term positions are looking for a rebound.

About 2,500 January 2014 20 calls traded in a strong buying pattern yesterday, with the largest blocks going for $5.30 and $5.35, according to optionMONSTER's Heat Seeker tracking system. The volume dwarfed the strike's open interest of just 97 contracts at the start of the session, indicating that this is new activity.

These in-the-money calls, which lock in the price where traders can buy the stock, are looking for APOL to gain more than 14 percent by the time they expire in 13 months. The options could be sold at a profit earlier if their premiums rise with any rally before then. (See our Education section)

APOL gained 4.93 percent yesterday to close at $22.15, continuing to drift higher since reaching a 52-week low of $18.63 on Nov. 20. The stock began the year trading around $53 stock but has been hit hard along with shares of other for-profit education companies.

Total option volume in the name was 5 times its daily average yesterday, with calls outnumbering puts by 7 to 1. The company is scheduled to release its next quarterly report on Jan. 8.
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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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