Bulls extending position in EMC


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EMC has been on an amazing run, and the bulls are betting that the good times will keep on coming.

EMC optionMONSTER's Heat Seeker tracking system detected the purchase of about 30,000 July 29 calls for $0.83 simultaneously with the sale of a matching number of April 24 calls for $2.86. Volume was below open interest in the April contracts, indicating a long position was rolled from one strike to the other.

The trade let the investor recover about $2.03 of premium while adding three months of exposure to the high-flying data-center stock, one of the biggest names in the cloud-computing sector. It has appreciated more than 60 percent in the last year and is already up 17 percent since 2011 began.

EMC is off slightly to $27.07 in morning trading, one session after hitting a nine-year high of $27.10. The latest catalyst came on Jan. 25, when earnings and revenue beat forecasts. Management also issued strong guidance and said it would buy back $1.5 billion of stock this year.

Another trader rolled a position in April calls, selling 27s for $1.05 and buying the 30s for $0.23. Overall option volume in EMC is more than triple the average amount so far today, with calls accounting for 96 percent of the activity, according to the Heat Seeker.

(Chart courtesy of tradeMONSTER)

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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This article appears in: Investing , Options

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