One investor wants to own Harman International before the audio
company reports earnings Friday morning.
optionMONSTER's Heat Seeker monitoring program detected the
purchase of about 1,000 November 45 calls for $0.94 and the sale of
a similar number November 42.50 puts for about $1.70. The
transaction resulted in a credit of $0.76 and is very similar to
owning shares: If HAR rallies, the calls they own will appreciate
and the puts they sold short will lose value, and the opposite will
be true to the downside.
Unlike owning shares, however, the entire position will expire
worthless if the stock closes between $42.50 and $45 on expiration
2-1/2 weeks from now. (See our Education Section.)
HAR is down 0.69 percent to $41.85 this afternoon and has been
swinging in a range for the last three years. The company had
reported a string of positive earnings reports as it gains market
share in the automotive market, but lowered its guidance in August
because of the weak euro.
The situation in Europe has stabilized since then, which could make
some investors more optimistic toward Friday's report and help
explain today's activity.
Overall option volume is quadruple the daily average so far today,
according to the Heat Seeker.
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