Call buyers bet on Cadence bounce

optionMONSTER

Traders apparently thinks that Cadence Design Systems is oversold.

optionMONSTER's Heat Seeker monitoring system detected the purchase of 3,000 November 15 calls for $0.15 and $0.20 yesterday. Volume was more than 5 times the previous open interest at the strike, indicating that new money was put to work.

These long calls lock in the price where shares can be purchased in the company, whose software is used to design integrated circuits. Investors use the contracts to cheaply position for a rally and to generate leverage if the stock climbs. (See our Education section)

CDNS rose 2.66 percent to $13.68 yesterday. It hit a five-year high of $15.96 in July but has been skidding lower since. The next earnings report is scheduled for Oct. 23 after the closing bell.

Total option volume was 63 times greater than average in the session, according to the Heat seeker. Overall calls outnumbered puts by more than 100 to 1.

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