One investor is looking for a rebound in VeriFone, which plunged
on a bad earnings report last week.
optionMONSTER's Heat Seeker monitoring program detected the
purchase of 6,583 September 32 calls for $0.81 and the sale of an
equal number of September 29 puts for $0.16. Volume was more than
triple open interest at both strikes.
The trade cost $0.65 and is similar to owning shares in the maker
of credit-card readers. The main difference is its short life span
because the position will expire worthless if the stock remains
between $29 and $32 through the end of next week.
PAY fell 1.27 percent to $31.76 yesterday and has lost more than 40
percent of its value since late April. While it was a high flyer in
2010 and early 2011, performance has weakened in the last year.
Revenue missed expectations most recently on Sept. 5, and
management slashed guidance after a fire in Brazil disrupted
The shares have been attempting to hold long-term support around
$30, so today's bullish trade appears to be the work of an investor
playing for quick a bounce. Their choice of the September 29 puts
is interesting because PAY hasn't touched that level in almost two
years. (See our
section for more on how options can be used to manage risk.)
Nearly 19,000 options changed hands in the name yesterday, well
over twice the average daily volume of about 7,000.
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