The bulls hope for more good news from Fortinet, which gapped
higher after a strong earnings report earlier this year.
optionMONSTER's Heat Seeker program yesterday detected the purchase
of 8,758 May 23 calls for $1.50 and the sale of an equal number of
May 26 calls for $0.475. Volume was more than triple the previous
open interest at each strike, indicating that new positions were
locks in the level where investors can buy shares, while selling
them fixes a potential exit price. Yesterday's traders will buy the
network-security stock for $23 and sell it for $26 if it rallies to
the higher price. It cost them $1.025 to open that $3 spread, a
profit of 193 percent on a move to $26. (See our
section for more on how to generate leverage with options.)
FTNT rose 0.45 percent to $22.31 yesterday. Following the rally in
late January, it consolidated and has now pulled back to the same
$22 level that was resistance in December. The company hasn't yet
announced the date for first-quarter earnings, but last year it
occurred on April 24.
Total option volume was 21 times greater than average in the
session, with calls outnumbering puts by a bullish 96-to-1 ratio.
(A version of this post appeared on I
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