NCR bulls hope to cash in on earnings
David Russell | [email protected]
optionMONSTER's Heat Seeker monitoring program detected a bullish trade in the maker of ATMs and cash registers, which already generated a big payday last month. This time, 3,500 May 33 calls were purchased for $1.85 and 3,500 May 36 calls were sold for $0.50, resulting in a net cost of $1.35.
If both positions were opened, then the transaction was a bullish call spread with the potential to more than double the investor's money on a move to $38 by expiration three weeks from now. Alternatively, an existing long-call position may have been rolled to the lower strike to increase the position's delta and provide more leverage to a rebound. Either way, the trade is bullish. (See our Education section)
NCR is down 2.95 percent to $32.76 in afternoon trading and has lost 18 percent of its value since hitting an all-time high of $41.63 in October. The Heat Seeker also identified buying in the July 35 calls on March 4 for $2, which almost doubled to $3.75 by March 27.
Earnings come out tomorrow afternoon. Profit beat estimates the last two quarters, but revenue missed.
Total option volume in the name is triple its daily average, with overall calls outnumbering puts by 285 to 1.