Bullish Call Buyers Target Symantec Corp. (SYMC)

07/13/2010 12:01 am EST

Focus: OPTIONS

At least one Symantec Corp. (SYMC) option investor appears to have expressed near-term bullishness by boosting call volume out of the gate on Monday. The August 16 calls were active during the morning session without any notable news from the computer software company on Monday.


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At 10:14 am ET, a block of 4,600 August 16 calls changed hands for 26 cents per contract, or the ask price at the time of the trade. Current open interest of these near-term calls is 1,140 contracts. This options action suggests the investor opened long call positions on a bet that SYMC shares will be trading higher than $16.26 at expiration. If SYMC shares rally roughly 10% during the next month and are trading higher than the breakeven price, this call buyer could theoretically make unlimited profits it the stock continues to the upside. The investor takes back some of the premium paid if SYMC shares are trading higher than the strike price, but lower than the breakeven price at expiration. Maximum loss on this long call position is the premium paid per contract, which investors lose if SYMC shares are still trading below the strike price at August expiration.

SYMC is due to announce earnings on July 28 after the market closes. This earnings event could be a catalyst to boost the stock at least 10% higher by August expiration. Analysts expect SYMC to announce earnings of 35 cents per share. SYMC gained 35 cents to $14.75 during morning trading. The stock is priced roughly 13% below is recent high of $17.

By the Staff at ONN.tv

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