Infinera is consolidating after a December rally, and one trader
sees more upside up next month.
optionMONSTER's Heat Seeker tracking system detected the purchase
of about 4,900 February 11 calls for $0.50. A matching number of
January 10 calls was sold at the same time for $0.45 against
existing open interest, indicating that a position was rolled from
January to February.
The optical-networking company fell 1.73 percent yesterday to
$10.22. The shares have been on a wild ride in the last year, more
than doubling between June and September, then cratering on Oct. 19
after a weak outlook and a Citi downgrade. INFN held its ground at
$8 throughout November and started rallying in December.
Today's call roll suggests it still has further to run because it
provided the investor with an additional month of upside exposure
for a net cost of $0.05. The trader was willing to accept a higher
break-even price of $11 versus $10, which reflects a belief that
INFN will rally more than $1 between the January and February
The transaction pushed overall option volume in INFN to 14 times
greater than average, with calls accounting for a bullish 99
percent of the activity.
The next earnings release is scheduled for after the bell on Jan.
(Chart courtesy of tradeMONSTER)
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