Fortinet has been trying to rally, and the bulls are looking for
the next leg higher.
optionMONSTER's Heat Seeker monitoring system detected the purchase
of 3,000 December 20 calls for $2.30 and the sale of an equal
number of December 26 calls for $0.35. Volume surpassed open
interest at each strike, indicating that new money was put to work.
Known as a
bullish call spread
, the trade cost $1.95 and will expand to $6 if the
network-security stock closes at or above $26 on expiration. That's
a potential profit of 208 percent from a move of a less than 25
percent in the underlying share price. (See our
section for more on how to generate leverage with options.)
FTNT is up 0.67 percent to $20.99 in morning trading. It touched a
52-week low of $16.47 in June but then started rallying as
expectations of its results improved. Shares were back above $20 by
July and have been mostly holding their ground since.
They peaked around $28 last year, so today's trade is looking for a
push back to the top of that range. Earnings will come out later
this month, though the date hasn't yet been announced, so the
investor is betting on a good report.
Total option volume is more than twice the daily average in the
name so far, according to Heat Seeker. Calls outnumber puts by a
bullish 54-to-1 ratio.
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.
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