Options Trading News

October 12, 2016  Wed 6:45 AM CT


A large trade is looking for gains in Palo Alto Networks by the end of the year.

optionMONSTER's market scanner shows that 3,649 December 170 calls were purchased for $3.90 and $4 while 3,649 December 180 calls were sold for $1.75 yesterday. These are clearly new positions, as volume was far above the open interest in both strikes.

This vertical spread is looking for PANW to rally above $170 by expiration in mid-December. The sale of the higher-strike contracts reduces the cost of the long calls but limits potential gains, as the trader will be obligated to sell shares if they rise above $180. (See our Education section)

PANW fell 2.67 percent to $155.48 yesterday but is up 26 percent in the last three months. The cybersecurity company's next quarterly report are estimated for release after the close on Nov. 21.

Overall option volume was 3 times greater than average in the name yesterday. Calls outnumbered puts by a bullish 3-to-1 ratio.

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