A long-term trade is betting big that News Corp. will continue to rally.
optionMONSTER's Heat Seeker monitoring program detected the purchase of 50,000 January 2014 30 calls for $1.40 and the sale of 50,000 January 2014 35 calls for $0.25. Volume was more than triple open interest at each strike, indicating that new positions were initiated.
The trade resulted in a cost of $1.15 and will earn a maximum profit of 335 percent if the media giant's stock closes at or above $35 on expiration. (See our Education section for more on the strategy, known as a vertical spread because it leverages a move between two price points in the same expiration period.)
NWSA fell 0.15 percent to $26.93 on Friday but is up 46 percent in the last year. The company has been rallying along with other media names as it separates its publishing and broadcasting operations.
The bullish call spread in NWSA was the largest trade in any single-name stock to cross our monitoring systems on Friday. It pushed total option volume in the name to 6 times greater than average, while overall calls in the name outnumbered puts by a bullish 289-to-1 ratio.
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