Calls see more upside in Sprint

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Sprint bounced sharply last month, and the bulls are looking for the next leg higher.


optionMONSTER's Heat Seeker monitoring program detected the purchase of 40,000 June 11 calls for $0.07. Some 20,000 June 9 calls were sold at the same time for $0.55, but volume was below open interest in those contracts, so it appears that an existing position was rolled to the higher strike and increased in size.

The investor collected $820,000 and remains positioned to profit from further gains in the wireless-communications stock through the new long calls . The trader also raised the price at which he or she can get long and doubled the number of contracts. (See our Education section)

S fell 0.44 percent to $9.06 yesterday. It traded as low as $7.38 on April 28 but jolted sharply higher late in the month and has been consolidating above its 50-day moving average in recent weeks. Based on yesterday's activity, the trader apparently thinks that the stock may run back toward its 52-week high above $11 by the third Friday of June.

Sprint's total option volume yesterday was triple its daily average, with calls outnumbering puts by more than 4 to 1.



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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