Options Trading News

November 30, 2012  Fri 12:21 PM CT

One investor apparently thinks that Banco Bradesco deserves more time to rally.

optionMONSTER's Heat Seeker monitoring program detected the purchase of 5,000 March 19 calls for $0.20 and the sale of an equal number of December 18 calls for $0.07. Volume was below open interest in the December contracts, indicating that an existing trade was rolled forward in time.

The investor now has an additional three months to benefit from upside in the Brazilian lender, paying $0.13 to adjust the position. Without that move, the trader would have seen premiums dwindle at an accelerating pace in the December contracts as expiration approaches in three weeks.

BBD is up 1.97 percent to $16.60 in afternoon trading. The stock has been fluctuating in a range for the last year and is now attempting to get above its 200-day moving average. If it succeeds, some chart watchers may consider it the beginning of a bullish turnaround.

Total option volume is 7 times greater than average so far today, with calls accounting for virtually all the activity.
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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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