Symantec draws bulls despite drop
Option traders have remained bullish on Symantec despite the recent decline in its stock, and they returned to buy more calls yesterday.
More than 4,500 January 22 calls were purchased yesterday, led by two prints of 2,643 and 1,200 that went for $1.76 and $1.75 respectively in less than a minute, according to optionMONSTER's Heat Seeker system. The volume was more than 3 times than the strike's open interest of 1,422 contracts before the session began, indicating that this is fresh buying.
SYMC fell 1.08 percent yesterday to close at $22.01. The security-software maker gapped down from above $25 on May 8 after lowering guidance and continued to fall sharply through last week, though it has managed to stay above its 200-day moving average.
The calls purchased yesterday, which lock in the price where the stock can be bought, will track the share price closely because they are in the money . The contracts are looking for SYMC to gain roughly 8 percent by early next year, but they will expire worthless if the shares don't rally. (See our Education section)
Calls outnumbered puts by 15 to 1, a reflection of the day's bullish sentiment toward the name.
Yesterday's bullish trades followed call buying in the July 25 strike at the end of last month. The company's next earnings report is scheduled for July 30, less than two weeks after those contracts expire.
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