How the bulls are navigating Riverbed


Shutterstock photo

Riverbed Technology has pulled back following a big move, but one investor is a believer over the long term.

optionMONSTER's Heat Seeker monitoring program detected the purchase of 3,000 September 21 calls for an average premium of $0.975 and the sale of an equal number of June 21 calls for $0.55. Volume was below open interest in the nearer-dated contracts, which suggests and existing position was closed and rolled forward in time.

Calls lock in the price where a stock can be bought, letting investors cheaply position for a rally. Capital can also be moved from one contract to another, avoiding the impact of time decay that eats away at options as days and weeks pass.

RVBD rose 0.15 percent to $19.49 in afternoon trading. The networking company fell to long-term lows in 2014, then rallied about 60 percent by late February amid takeover rumors. It's been skidding lower since.

Given that the short-term momentum is bearish, today's investor is wants more time for the shares to bounce. Adjusting he or her position cost about $0.425, but also gave them an additional three months. That will protect them against time decay in the near term. (See our Education section.)

The company's next earnings report is scheduled for April 29.

Overall option volume is 7 times greater than average in the name, according to Heat Seeker. Calls account for a bullish 80 percent of the total.

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