VMware has been exploding higher all year, and now one bear is
looking for a reversal lower.
optionMONSTER's Depth Charge tracking system detected the purchase
of 1,500 August 70 puts for $2.87, matched against the sale of an
equal number of August 60 puts for $0.72. The trade resulted in a
net debit of $2.15.
VMW rose 3.84 percent to $74.12 in morning trading. The maker of
server-cloning software has rallied 74 percent this year amid
strong growth in the data-center and cloud-computing sectors, and
it is pushing through the $72 resistance level from May 2008.
Today's trader apparently thinks the shares will struggle to
maintain their run and is positioning for a selloff. The put spread
will earn a maximum profit of 365 percent if VMW closes at or below
$60 on expiration. (See our Education section)
The company crushed forecasts the last time it reported earnings on
April 20 and issued bullish guidance for the following quarter, the
results of which will be released after the bell on July 20.
VMW is up 18 percent so far this month and today is popping more
than 4 percent after a strong report by semiconductor bellwether
Overall options volume in VMW is more than twice the average level
today, with puts accounting for 57 percent of the activity.
(Chart courtesy of tradeMONSTER)