Nasdaq bulls looking for more upside


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Nasdaq OMX Group has been running higher, and the bulls are sticking around for more upside.

optionMONSTER's Heat Seeker monitoring program detected the purchase of 4,000 June 36 calls for $1.10 and the sale of an equal number of March 31 calls for $1.75. Volume was below open interest in the March contracts, which suggests that an existing long position was closed and rolled forward in time.

The investor collected a credit of $0.65 in the process and now has an additional three months of upside exposure in the high-flying financial stock. He or she probably bought the calls when it was lower and now wants to recover some of their capital at risk. Adjusting the position also keeps the 31 calls from being converted into stock at the end of next week. (See our Education section)

NDAQ is up fractionally at $32.48 near midday trading and has gained 30 percent so far this year. It's been rallying on strong quarterly results and as a new bull market in equity draws investors to financial exchanges.

Total option volume is 5 times greater than average in the stock so far today, according to the Heat Seeker. Calls outnumber put by a bullish 19-to-1 ratio.

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

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