Inuit has pulled back to a key long-term level, and one investor is adjusting a bullish strategy.
optionMONSTER's Heat Seeker tracking system detected the purchase of 4,377 January 46 calls for $2.40 and the sale of 4,377 January 37.50 puts for $2.15. Volume was more than 18 times open interest in both strikes.
Equal-sized blocks traded in the January 40 puts for $3.20 and the January 50 calls for $1.15. This time, however, volume was below open interest and the calls were sold while the puts were purchased.
That suggests that an existing bullish position in the 40s and 50s was closed at a net cost of $2.05, while a new trade was opened in the 37.50s and the 46s for $0.25. The combined outlay was $2.30.
As a result, the trade now stands to profit more quickly from upside in the maker of tax and accounting software. If INTU returns just to $50 by expiration, for example, the position will make 74 percent on today's investment. Without an adjustment, the trader would have made nothing from the previous position.
INTU is down 0.19 percent to $41.97 in morning trading and is attempting to hold support around the same level where it popped gapped higher almost exactly one year ago. It's also the same price area where the stock peaked during the tech bubble at the turn of the century.
The company has been a steady uptrend for years amid growing demand for its TurboTax product. The last earnings report on May 19 beat expectations on the top and bottom lines, but guidance was weak. The next release is scheduled for next Thursday afternoon, Aug. 18.
Intuit's overall option volume is 13 times greater than average so far today, according to the Heat Seeker.
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