Finisar trader expects strong results

By David Russell,

Shutterstock photo

One investor expects a strong earnings report from Finisar after the bell today.

optionMONSTER's Heat Seeker tracking system detected the purchase of 5,000 December 18 calls for $1.60 and the sale of an equal number of December 17 puts for $1.20, resulting in a cost of $0.40.

The trade is similar to owning shares in the maker of fiber-optic equipment, profiting to the upside and losing money to the downside. The main difference is that if the stock fails to move, the position will expire worthless.

FNSR is up 3.39 percent to $17.69 in afternoon trading. It lost more than half its value earlier in the year after an inventory glut caused management to issue weak guidance but has been grinding sideways since then. Its last report on Sept. 2 showed potential improvement, with earnings strong and guidance both strong. (See researchLAB for more)

The bullish trade pushed overall option volume in FNSR to 5 times greater than average so far today, 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
Referenced Stocks: FNSR

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