Tibco Software got crushed yesterday, but one investor is
looking for a rebound.
optionMONSTER's Heat Seeker trade scanner detected the purchase of
1,400 May 25 calls for $1.05. Equal-sized blocks were sold at the
same time in the May 28 calls for $0.40 and the May 29 calls for
$0.20. Volume was below open interest in the May 29s, so there are
two possible explanations for the trade.
One is that the investor previously owned the May 29s and rolled
the position down to the lower strike after yesterday's selloff. He
or she then sold the May 28s to reduce their cost, setting them up
for a bounce above $25. (See the discussion of
The other possibility is that all three contracts were opened. In
that event, the trade was a "
" spread at a cost of $0.45. It would earn a maximum profit of
1,011 percent if the stock closes between $25 and $26 on
expiration. Gains would erode above that range and turn to losses
TIBX is up 1.5 percent to $20.30 in afternoon trading. The business
software company fell yesterday after predicting fourth-quarter
results would miss consensus estimates and is now trying to bounce
around its lowest level since September 2011.
Total option volume is triple the daily average so far today, with
calls outnumbering puts by 20 to 1.
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