Bulls think CBOE is ready to run

By David Russell,

Shutterstock photo

CBOE Holdings seems to be bottoming, and now the bulls are stepping in.

optionMONSTER's Heat Seeker tracking system detected the purchase of more than 2,000 January 23 calls for $0.55 and $0.60 against open interest of 597 contracts. The activity pushed total option activity in the stock to 12 times greater than average.

CBOE Despite running the largest option exchange in the country, CBOE is a thinly traded name that usually sees volume of fewer than 400 contracts a day.

CBOE rose 0.04 percent to $22.43 yesterday and has lost more than 30 percent of its value since going public in June. Many companies languish for year or so after going public as investors get up to speed and as it gets added to indexes.

Yesterday's call buyer apparently thinks CBOE is ready to get noticed and needs the shares to climb at least 5 percent for the options to turn a profit. (See our Education section)

The stock also seems to be finding support around the same $22 level where it peaked in mid-September, which would suggest a bullish trend is developing. The broader financial sector has been strong recently, and rival Nasdaq OMX Group has been probing long-term resistance.

CBOE's last earnings report on Nov. 4 beat forecasts as the company generated more revenue per transaction. There also appears to be significant short interest in the stock, which could help push it higher.

The next earnings release is scheduled for the premarket on Feb. 10.

(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.

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

This article appears in: Investing Options
Referenced Stocks: CBOE

More from optionMONSTER




Follow on:

Find a Credit Card

Select a credit card product by:
Select an offer:
Data Provided by BankRate.com