T-Mobile rallied hard last month, and now the bulls are back.
optionMONSTER's Heat Seeker monitoring system detected the purchase
of 5,000 February 35 calls for $0.70 and the sale of an equal
number of February 40 calls for an average premium of $0.075. That
translates into a cost of $0.625.
Known as a
bullish call spread
, the trade leverages a move between two price points--in this case
$35 and $40. The position will expand to $5 if the top of that
range is reached, a gain of 700 percent from the entry price. (See
TMUS is up 1.44 percent to $32.96 and has risen 24 percent since it
was recommended on the Dec. 3 edition of optionMONSTER's
webinar. The wireless carrier is now filling a bearish gap from
August 2007. Its all-time high earlier that year was $40.87, so
today's option trade is looking for a return to those historic
Total option volume is slightly above average in the name so far
today, with calls outnumbering puts by more than 100 to 1.
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