Fireworks expected from Fusion-IO

optionMONSTER

Someone expects fireworks when Fusion-IO reports earnings tonight.

optionMONSTER's Heat Seeker monitoring system detected the purchase of about 9,600 March 20 calls for $2.20. Volume was more than 6 times previous open interest at the strike, indicating that new money was put to work.

Long calls lock in the price where investors can buy shares in the provider of data-center products. They can generate some nice leverage in the event of a rally but could lose all their value from even a modest drop. The advantage of the options over stock is that they limit the investor's capital at risk because they cost a fraction of the share price. (See our Education section)

FIO is up 3.6 percent to $20.15 in midday trading, near the lower end of its range in the last year. That could be leading some chart watchers to believe that a bounce is likely.

The next big catalyst for a move comes after the closing bell today when fiscal second-quarter earnings are released. Shares dropped after the last report in October because management issued weak revenue guidance.

Total option volume is quadruple the daily average in FIO so far today, with calls outnumbering puts by almost 3 to 1.

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