Jive Software has been weak, but one trader expects on a turnaround.
optionMONSTER's Heat Seeker monitoring system detected the purchase of 1,350 October 17.50 calls for $0.75 and the sale of an equal number of October 12.50 puts for $0.35. Volume surpassed open interest at both strikes, indicating that a new bullish position was initiated.
The investor paid $0.40 and stands to profit from a rally in the software company, whose products combine social media with business applications. They also stand to lose money to the downside because of the short puts. While similar to owning shares, the strategy differs because both the calls and puts will expire worthless if the stock remains between $12.50 and $17.50.
JIVE rose 2.08 percent to $15.70 yesterday. It went public for $12 in December 2011, rallied as high as $28.15 in March and has been dropping since. The last earnings report on Aug. 7 added to the bearishness because guidance was below consensus.
The stock has nonetheless held its ground since, which could make some investors expect a rebound.
Monday's bullish trade pushed total option volume in the name to 12 times greater than average, according to Heat Seeker.
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