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Trader looking for rally in Nasdaq OMX

Posted
5/10/2011 1:54:00 AM
By: optionMONSTER
Referenced Stocks:NDAQ

Nasdaq OMX Group has peaked around $29 twice so far this year, and a leveraged trade is looking for a break above that level by late summer.

optionMONSTER's Heat Seeker tracking system detected the purchase of 2,500 September 29 calls for $1.40 and the sale of an equal number of September 25 puts for $1.30. Volume was more than twice open interest in both strikes.

The trade cost just $0.10 and will simulate owning shares in the company, which operates financial exchanges such as the Nasdaq Stock Market and the bourses of Finland and Sweden. It will track NDAQ less slowly as time passes and expire worthless if the stock is between $25 and $29 on expiration. The real money will be made from a break above resistance at $29, and losses will occur toward or below $25.

It rose 2.93 percent to $27.37 yesterday and is up 15 percent so far this year. The stock has been steadily trending higher, following its 100-day moving average upward. NDAQ's last earnings report on April 20 matched estimates on the bottom line and exceeded consensus on revenue, though attention has mostly focused on the company's efforts to purchase NYSE Euronext.

Yesterday's bullish trade pushed total options volume in NDAQ to 11 times greater than average, according to the Heat Seeker.