Hasbro has slipped into a tight range recently, but one large trader apparently believes that the toy maker is winding up for more gains later in the year.
optionMONSTER's Heat Seeker system shows that a trader sold 11,847 July 42.50 calls for $2.05 and bought the same number of October 45 calls, also for $2.05. Volume was below the previous open interest in the nearer-term options, which expire in a month, but far above it in the later-dated contracts.
The indicates that the trader is rolling an initial long-call position foward now that the July calls are in the money and is positioning for further gains for another three months. With this adjustment, which cost nothing except fees and commissions, the new long calls are looking for HAS to rally above $47.05 by mid-October but will expire worthless if the stock remains below the $45 strike price. (See our Education section)
HAS rose 1.21 percent on Friday to end the week at $44.34. The gapped higher after first-quarter results in late April and hit a 52-week high at $48.97 on May 22, but it fell sharply later in the month and has been trading sideways ever since.
The company will report second-quarter earnings on July 22. Third-quarter earnings are scheduled for Oct. 21, one session after the October options expire.
Overall option volume in HAS totaled 26,476 on Friday, 79 times its daily average for the last month. Only 241 puts traded in the session.
More From optionMONSTER