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Options Trading News

April 8, 2013  Mon 9:34 AM CT

CTXS: SEE CHART GET CHAIN FIND STRATEGIES
Citrix Systems fell hard last week, but the option paper is bullish today.

Our Heat Seeker monitoring system detected the purchase of 3,000 June 67.50 calls for $4.60 and the sale of an equal number of June 72.50 calls for $2.40. Volume was below open interest at the 72.50s, so there are two possible explanations for the trade.

One is that a new bullish call spread was opened at a cost of $2.20 with potential profit of 1.27 percent on a move to $67.50. Alternatively, the trader may have rolled an existing long position lower. The latter would have also cost $2.20 but would increase leverage in the event of a rally. (See our Education Section for more on how options can be used to manage trades.)

CTXS is down 2.53 percent to $67.16 in morning trading. It gapped higher following a strong earnings report on Jan. 30 but has been drifting lower along with other technology companies since mid-March. The selling has intensified in the last week, with a drop of almost 7 percent.

The next earnings-release date hasn't been announced yet, but last year's schedule suggests that it will be around April 25. Today's trader stands to benefit from a good report.

Total option volume is quadruple the daily average so far today, according to Heat Seeker. Calls outnumber puts by a bullish 10-to-1 ratio.
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