BMC Software might pull back a small amount, but one investor is
confident in the longer term.
optionMONSTER's tracking programs detected unusual put volume in
the company, which reports earnings after the bell on Monday. Some
5,300 February 41 puts were bought for an average premium of
$0.425, while an equal number of May 40 puts were sold at the same
time for $1.05. Volume was below open interest in the February
contracts, so there are two possible interpretations of the trade.
One is that the trader
the February puts to earn income, and now rolled that position
forward in time. Alternatively, he or she may have opened both
parts of the trade, which would make it a
with the March puts poised to make money from a quick but limited
drop. (See our
BMC fell 1.03 percent to $43.36 yesterday. The stock has been
grinding higher since November and is now stalling around the same
$44-$45 area that's been resistance for the last year.
Given that earnings are coming out soon, the investor may expect a
limited drop in the near term but apparently thinks that the stock
will then remain above $40 in subsequent months. The trade
collected a credit of $0.625 in the process.
Overall option volume was 11 times greater than average in the
session, with puts accounting for 97 percent of the total.
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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