Pandora bulls look for more upside

By David Russell,

Shutterstock photo

Pandora Media is ripping today, and the bulls are looking for more upside.

optionMONSTER's Heat Seeker monitoring program detected the purchase of about 10,000 September 14 calls for $0.88 and the sale of an equal number of September 9 puts for $0.65. Volume was more than 14 times open interest in both strikes.

The trade cost $0.23 and is similar to owning shares in the online music company. They'll make money from the long calls if the stock continues to appreciate and face losses on the short puts if it drops.

The main difference between the position and owning equity is that it will track movements in the share price less closely as time passes. It will also expire worthless if P remains between $9 and $14 through Sept. 21. (See our Education section)

P gapped higher on the open after reporting a narrow-than-expected first-quarter loss and better-than-expected revenue. The stock is currently up 17 percent to $12.11 in morning trading.

Overall option volume in P is 9 times greater than average so far today, according to the Heat Seeker.

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
Referenced Stocks: P

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