Markets

How the bulls are playing Activision

Activision Blizzard has pulled back to support, and the bulls are stepping in.

optionMONSTER's Heat Seeker tracking system detected the purchase of 3,717 March 12 calls for $1 and the sale of an equal number of March 13 calls for $0.54. Volume was more than 4 times open interest in both strikes.

This bullish call spread resulted in a debit of $0.46 and will earn a maximum profit of 117 percent if the videogame maker closes at or above $13 on expiration.

ATVI fell 1.88 percent to $12.01 in morning trading. It traded above $14 last month following a strong earnings report, but has been falling since then along with the rest of the market and as investors worry about customers abandoning its World of Warcraft franchise.

Despite those concerns, ATVI has reported strong initial demand for its new "Call of Duty: Modern Warfare 3" game. The stock is also sitting around the same level where it peaked in June and July, which some chart watchers may consider a bullish indicator. (See our Education section)

Overall option volume is almost twice the average amount so far today, with calls outnumbering puts by 87 to 1.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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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.

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