Traders are betting that Teradata will rebound sharply in the next month.
More than 2,300 March 70 calls traded in a strong buying pattern on Friday as premiums rose from $0.20 to $0.35, according to optionMONSTER's Heat Seeker program. The volume was above the strike's open interest at the beginning of the day, indicating that these are new positions.
The long calls , which lock in the price where traders can buy shares, are looking for TDC to gain roughly 12 percent or more by mid-March. The options could be sold at a profit before then if their premiums rise with any rally, but they will expire worthless if the stock is below the $70 strike price at that time. (See our Education section)
TDC rose 0.71 percent to $62.59 on Friday. The data-warehousing company gapped down from the $66 level on Feb. 7 after issuing guidance that was below analysts' expectations, and shares have been trading around the $62 since then.
Only 100 puts traded in the entire session, a reflection of the day's bullish sentiment. The company is scheduled to present at the Morgan Stanley Technology, Media & Telecom Conference on Feb. 26.
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