Oracle has been one of the strongest large-cap tech stocks in
the last year, but one investor sees the gains slowing.
optionMONSTER's screening programs detected the sale of 6,500
December 29 puts for $1.18 and the 6,500 December 37 puts for
$1.99. Volume was more than 85 times open interest in both strikes.
The trade, known as a short strangle, produced a credit of $3.17,
which the investor will keep if ORCL closes between $29 and $37 on
expiration. (See our Education section)
ORCL rose 1.88 percent to $34.75 on Thursday and has delivered
almost twice the gain of the Nasdaq Composite index since the
beginning of 2011. The database company has benefited from a series
of successful acquisitions, a rebound in technology spending and a
shift toward software subscriptions. The last earnings report on
March 25 beat estimates on the top and bottom lines.
Thursday's strangle seller apparently thinks that a lot of the good
news is already priced in for ORCL and anticipates the pace of its
rally to slow. He or she may also expect it to remain below $37
because that level offered support and resistance as the shares
were churning at the end of the tech bubble in 2000. (See this
story for more on how investors use chart analysis to craft such
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.
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