One big investor is betting that Salesforce.com will break out.
optionMONSTER's Heat Seeker tracking system detected the purchase
of 7,000 April 150 calls for $5.40 and the sale of an equal number
of April 170 calls for $0.70. Volume was more than 8 times open
interest in both strikes.
bullish call spread
cost $4.70 to open. It will earn a maximum profit of 326 percent if
CRM closes at or above $170 on expiration, about $10 above its
all-time high from last summer. (See our
The stock, whose ticker stands for "customer relationship
management," is up 0.74 percent to $147.16 in midday trading. Its
web-based products are used by a wide array of companies on a
subscription basis. Investors like that model because it generates
a steady flow of revenue, compared with the older system where
programs were bought and installed in one shot at a time.
CRM's last financial report on Feb. 23 beat expectations in both
earnings and revenue. Guidance was also strong, causing the shares
to gap higher. Since then they have been consolidating in a range.
Overall option volume is slightly above average in the stock so far
today, with calls outnumbering puts by more than 8 to 1, according
to the Heat Seeker.
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