Bulls stay on the line with Sprint Nextel

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The options activity remains bullish in Sprint Nextel, which has already doubled since the spring.

Our Heat Seeker monitoring program detected the purchase of about 10,000 October 5 calls for $0.45 and the sale of a similar number of October 6 calls for $0.13. Volume was more than 10 times open interest at both strikes.

The trade cost $0.32 and will roughly triple the investor's money if the wireless-telecom stock closes at or above $6 on expiration. It's known as a bullish call spread because it leverages a move between two prices, in this case, $5 and $6. See our Education Section for more on how options can be used to amplify moves in stock prices.

S fell 3.15 percent to $4.92 in afternoon trading, and has been pulling back following a big rally between June and mid-August. The stock had lost more than half its value in the preceding year, but results have been better recently as the addition of iPhones helps retain customers.

Overall option volume is about average in the name so far today, but calls outnumber puts by more than 3 to 1, according to Heat Seeker.



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

Copyright © 2010 OptionMonster® Holdings, Inc. All Rights Reserved.


This article appears in: Investing , Options

Referenced Stocks: S

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As of 7/29/2014, 04:04 PM