An investor is extending a bullish position in Xerox.
optionMONSTER's Heat Seeker system detected the sale of 2,200 April 11 calls for $1.95 and the purchase of 2,200 October 12 calls for $1.47. Volume was below previous open interest in the lower strike, indicating that a long positions was rolled forward.
The trader is closing the April contracts, which expire at the end of next week, and is opening a new position six months later at a strike that is $1 higher while taking some money off the table. The new long calls will gain in value with a rally but lose value on a pullback, closely tracking the share price as these contracts are in the money. (See our Education section)
XRX was up a penny yesterday to close at $12.96. The photocopier icon and document-management company fell from $14 in late February to about $12.50 a month later but has been trying to bounce in recent days. Its next quarterly results are scheduled to come out on April 24.
Overall option volume in the name topped 6,000 contracts yesterday, quadruple its daily average for the last month. Total calls outnumbered puts by more than 10 to 1.
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