Salesforce.com has rallied sharply since its earnings report in late February, and traders are betting that the uptrend will continue.
optionMONSTER's market scanner detected the sale of 4,000 May 80 calls sold for $1.33 to $1.36 and 2,000 May 85 calls for $0.43 to $0.46 yesterday. At the same time, 6,000 June 85 calls were purchased for $0.82 and $0.83. Volume was below open interest in the May contracts, indicating that bullish positions were consolidated and rolled into a single strike one month later.
Long calls lock in the price where investors can buy stock, allowing them to profit from a rally with limited capital at risk. Their cheap cost can also generate significant leverage on a percentage basis if shares move in the right direction. (See our Education section)
CRM fell 0.63 percent to $73.83 yesterday. The cloud-software company gapped up from below $63 after reporting bullish quarterly results on Feb. 24 and is up 10 percent in the last month. Its next earnings release is expected after the close on May 18.
Overall option volume was twice the daily average. Calls outnumbered puts by a bullish 6-to-1 ratio.
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