Shares of Glu Mobile have been cut in half in the last four months, but some traders apparently believe that the game company's stock will pop in the next few weeks.
optionMONSTER's Heat Seeker system shows that more than 1,000 February 2.50 calls traded in a strong buying pattern yesterday, most of them going for $0.15. The volume was above the previous open interest in the strike, indicating new activity.
GLUU rose 0.51 percent yesterday to close at $2.36. The mobile-game maker was trading around $4.80 in September before plunging to a 52-week low of $1.99 in mid-November. Since then the stock has been trapped in an increasingly tight range with its 50-day moving average as resistance.
Yesterday's long calls , which lock in the price where traders can buy the stock, are betting that GLUU will gain roughy 12 percent or more by Feb. 15. But these options will expire worthless if the shares are below the $2.50 strike price at that time. The company is scheduled to report fourth-quarter and full-year results on Feb. 5 after the close.
Total option volume in GLUU was 1,920 contracts, more than 11 times its daily average in the last month. Only 20 puts changed hands in the name, a reflection of the session's bullish bias.
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