Take-Two Interactive Software reported strong earnings after the
bell yesterday, and some traders seemed to know that good news was
With less than an hour remaining before the close, optionMONSTER's
Heat Seeker tracking system detected heavy buying of both calls and
shares in the video-game publisher, whose titles include "Grand
Theft Auto" and "Mafia II."
Investors bid up the December 12.50 calls from $0.20 to $0.40 at
the same time that the shares rose less than $0.10, which reflects
the heavy demand.
The calls traded more than 4,200 contracts. It's not clear whether
the buyers were opening new
long positions or closing existing short positions because volume
was below open interest.
TTWO ended the session down 0.5 percent at $11.94. The stock has
climbed 44 percent since the beginning of September, when it gapped
higher on strong fourth-quarter guidance.
The stock rallied another 6 percent in extended trading yesterday
after results crushed forecasts: Per-share earnings were $0.58,
versus the $0.31 estimate, while revenue surged to $373.7
million--15 percent more than expected.
TTWO has faced resistance around $12.50 since late 2008. If it
breaks that level in regular trading, some chart watchers may
expect a big rally.
Short interest represented a hefty 25 percent of the float at the
end of November, so the late-session bullish activity may have been
the work of a bear looking to hedge a bet against the stock.
Overall option volume in TTWO was 20 times greater than average,
according to the Heat Seeker. Calls accounted for about 72 percent
of the activity.
(Chart courtesy of tradeMONSTER)
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