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Quicksilver bulls hope to ride high

Posted
9/3/2013 10:56:00 AM
By: optionMONSTER
Referenced Stocks:ZQK

The bears have made money in Quicksilver, and now the bulls are taking a shot ahead of earnings this week.

optionMONSTER's Heat Seeker monitoring system detected the purchase of almost 2,500 October 5 calls, most of which priced for $0.45. Volume was well above open interest at the strike, indicating that new positions were initiated.

These long calls lock in the price where shares can be purchased in the surfing retailer, giving them potentially significant leverage to the upside. The trade appears before earnings are released on Thursday afternoon, so the investor is wagering on a strong report.

ZQK is up 3.84 percent to $5.14 in morning trading but has fallen more than 30 percent in the last three months. Our premium subscribers captured some of that move, picking up the January 6 puts on July 12 for $0.50 and selling them for $0.95 barely a month later. Puts work the opposite as calls, locking in selling prices and gaining value when shares decline. (See our Education section)

Overall option volume is ZQK is twice the daily average so far today, according to the Heat Seeker, with calls accounting for a bullish 87 percent of the total.