Options Trading News

July 3, 2013  Wed 3:47 AM CT

Oracle is attracting a bullish combination trade for the second time in less than a week.

A trader bought 5,250 August 34 calls for $0.04 less than 3 minutes before yesterday's close and, at the same second, sold 5,250 August 25 puts for $0.04, according to optionMONSTER's tracking systems. Volume was well above the previous open interest in each strike, showing that this is new positioning.

The trade was similar to one opened last Thursday, when 5,000 August 31 calls were bought and the same number of August 29 puts were sold.

The strategy behind both trades is highly bullish, as a rally by mid-August would increase the value of the long calls while rendering the puts worthless. However, the opposite would occur if the stock drops. (See our Education section)

ORCL was down a penny yesterday to $30.10. The database company, which gapped lower after its last two earnings reports in March and last month, is now trading at its lowest levels since November. But the stock has also held support above $29 since last July, so traders may think that chances are good for a bounce.
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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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