Market News

October 18, 2016  Tue 6:45 AM CT

At least one trader is betting that Activision Blizzard will rally in coming weeks.

optionMONSTER's market scanner shows that 2,300 November 48 calls were purchased in one print for $0.28 yesterday. This is clearly a new position, as volume was more than double the strike's open interest of 1,115 contracts.

Long calls lock in the price where investors can buy stock, allowing them to profit from a rally with limited capital at risk. Their cheap cost can also generate significant leverage on a percentage basis if shares move in the right direction. (See our Education section)

ATVI fell 0.37 percent to $43.53 yesterday but is up 4 percent in the last three months. The video-game developer is scheduled to release quarterly results after the close on Nov. 3.

Overall option volume was about average in ATVI yesterday, with calls outpacing puts by a narrow margin.

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Using puts to BUY stock

Puts are an options contract that gives buyers the right to sell their stock for a set price on or before a future date. However, puts can also be an effective way to BUY stock.

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