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November 15, 2012  Thu 2:45 AM CT

CLWR: SEE CHART GET CHAIN FIND STRATEGIES
One investor is keeping hope alive in Clearwire, which is already up 61 percent since the beginning of October.

optionMONSTER's Heat Seeker monitoring system detected the purchase of 19,500 January 2.50 calls for $0.30 and the sale of an equal number of December 2 calls for $0.37. Volume was below open interest in the December options but not the January contracts, indicating that an existing position was rolled from one contract to the other.

The investor collected a credit of $0.07 and has an additional month to profit from upside in the wireless-broadband stock. He or she also raised the break-even price by $0.50.

CLWR fell 2.93 percent to $2.16 yesterday. It exploded higher in October after Japan's Softbank agreed to buy 70 percent of Sprint Nextel, which was a major shareholder in CLWR. That incited a flurry of takeover speculation in the smaller company.

Based on yesterday's activity, the investor expects the shares to start rallying again in the next 5-1/2 weeks. If it doesn't climb, the long calls will expire worthless. (See our Education section)

Total option volume was quadruple the daily average yesterday, according to Heat Seeker. Calls outnumbered puts by 65 to 1.
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So far, my articles have taken you through a logical progression of option theory and fundamental concepts of options. As of yet, I have not mentioned a single strategy and for a good reason! The actual application of a strategy should come AFTER you learn about the option product itself.

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