Options Trading News

April 28, 2014  Mon 12:20 PM CT

Investors are hoping NCR will be a money machine when it reports earnings tomorrow.

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.
Share this article with your friends

Related Stories


NCR bulls want to ring the register

February 9, 2015

Weak sales of legacy products including cash registers and ATMs have weighed on sentiment, but management is trying to grow new businesses such as software and professional services.



The fastest money in the market
View full report »

Premium Services

Webinar Recording

Turbo Charge Your Trading Profits

Education & Strategy

The Strike-Based Greeks

The other Greeks (Gamma, Vega, and Theta) are calculated by using month and strike data, and not by individual option. These are called strike-based Greeks. Gamma, Theta, and Vega are all strike-based Greeks

View more education articles »