Call buyer is banking on Bradesco


Shutterstock photo

Banco Bradesco has been climbing, and one investor is looking for another push to the upside.

optionMONSTER's Heat Seeker monitoring system detected the purchase of 2,605 November 18 calls for $0.59. The trade came against no previous open interest and dominated activity in the Brazilian lender so far today.

Buying calls
locks in the price investors must pay to purchase a stock. These options can generate significant leverage if the stock continues to rally, but they will expire worthless if it fails to move.

BBD is down 0.29 percent to $17.49 in afternoon trading but is up more than 20 percent in the last two months. The stock has been climbing as sentiment improves toward both emerging markets and financials. It's been hovering around its current level since mid-August.

Owning calls will give the investor exposure to a rally at low cost while limiting losses in case the shares reverse lower. (See our Education section for more on how options can be used to manage risk.)

More than 4,000 contracts have traded in BBD so far today, compared with average volume of about 1,100. Calls outnumber puts by a bullish 10-to-1 ratio, according to the Heat Seeker.

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

More from optionMONSTER




Follow on:

Find a Credit Card

Select a credit card product by:
Select an offer:
Data Provided by