Credit: Shutterstock photoAdobe Systems reports earnings this afternoon, and traders are looking for a move.
optionMONSTER's tracking systems detected unusual activity in the July 29 puts and the July 33 calls. In the first transaction, some 2,400 contracts were bought in each for $0.52 and $0.82, respectively. Known as a strangle, the strategy will profit from ADBE popping to the upside or dropping lower.
Roughly the same number traded again for $0.48 and $0.84 less than 40 minutes later, though it appears that the puts were sold and the calls bought. That suggests a more bullish sentiment and would simulate owning shares in the software company. (See our Education section)
ADBE rose 2.15 percent to $31.61 in morning trading but came into the session with a 10 percent drop since the start of June. The last earnings report on March 22 was in line with forecasts, but management cut guidance because it expected the Japanese earthquake to disrupt business.
The stock bounced yesterday at about the same level where it traded immediately after a bullish gap in December, which could lead some chart watchers to believe that it has rebounded at support and is now poised to move higher.
Volume was more than twice open interest in the July 29 puts and the July 33 calls. In ADBE overall, option activity was 6 times greater than average.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
