Complex strategy is bullish on Oracle
A three-way trade is looking for Oracle to rally this summer.
optionMONSTER's monitoring system shows that 5,000 Weekly 41 calls expiring on July 8 were sold for $0.29. At the same time, 5,000 Weekly 41.50 calls expiring on Aug. 12 were bought for $0.64 and 5,000 Weekly 43 calls in the same expiration were sold $0.19.
Volume was below open interest in the July calls, and there was no open interest in the August contracts. This indicates that a long-call position was closed and rolled into a bullish vertical spread five weeks later.
The new call spread is looking for ORCL to rally above $41.50. The sale of the higher-strike contracts reduces the cost of the long calls but limits potential gains, as the trader will be obligated to sell shares if they rise above $43. (See our Education section)
ORCL rose 0.94 percent to $40.93 yesterday and is up 1 percent in the last week. The database maker reported bullish results on June 16 and is expected to announce its next quarterly numbers after the close on Sept. 15.
Overall option volume was about average in ORCL yesterday. Calls outnumbered puts by a bullish 6-to-1 ratio.
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