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MicroStrategy pullback attracts bulls

By: optionMONSTER
Posted: 6/11/2012 4:51:00 AM
Referenced Stocks: MSTR

One investor likes the recent pullback in MicroStrategy.

optionMONSTER's Heat Seeker tracking system detected the purchase of about 2,000 October 135 calls for $9.10 and the sale of an equal number of October 105 puts for $7. Volume was more than twice open interest at both strikes.

The trader paid $2.10 to open the position and will make money on the calls if the software maker rallies. He or she will also profit from the puts sold short losing value, which makes the trade similar to owning shares. The main difference is that the option strategy will track the stock less closely as time passes and expire worthless if it stays between $105 and $135.

MSTR rose 0.16 percent to $122.16 on Friday. It gapped higher after a strong earnings report early last month before skidding lower along with the rest of the market. Some investors may expect the shares to climb in coming weeks as traders price in another strong set of numbers this summer.

The release date for second-quarter report hasn't been announced, but last year it came out  on Aug. 2.

Overall option volume was 16 times greater than average in Friday's session.