Big move seen in Activision Blizzard

optionMONSTER

Higher or lower, one investor expects a move when Activision Blizzard reports earnings this week.

optionMONSTER's tracking systems detected the purchase of 6,500 June 16 calls for $0.30 in volume well above the previous open interest of 2,353 contracts. Less than a minute later a large block of ATVI shares was sold, indicating that the overall trade is a delta-neutral strategy.

Being long calls and short stock makes the investor directionally agnostic on the stock. The purpose of the trade is to profit from increased volatility in the video-game maker, which would drive up the value of the options. (See our Education section)

It's interesting to see such a bet before Wednesday afternoon's earnings report because volatility normally drops after results come out. The use of the June contracts reflects a belief that the stock will remain active in subsequent months.

ATVI is down 1.25 percent to $14.99 in early afternoon trading but is up more than 40 percent so far this year. Sentiment toward the name has been recovering lately after a long period of underperformance, with earnings beating estimates for at least four straight quarters.

Total option volume is more than quadruple the daily average so far today.


More From optionMONSTER

Rates

View Comments (0)