Riverbed plunged yesterday in its first session since announcing its $1 billion acquisition of Opnet Technologies, but some traders saw the drop as a buying opportunity.
More than 6,400 November 20 calls traded in a strong buying pattern yesterday, including a single print of 4,076 that went for $0.31, according to optionMONSTER's Heat Seeker tracking system. Volume was 18 times the open interest of 363 contracts at the start of the session, so this is clearly new activity.
RVBD plummeted 18.35 percent to close at $18.47 after gapping lower at the open and dipping below $18. The data-center operator announced the purchase of Opnet for $1 billion on Monday, which represented a premium of about 34 percent above OPNT's previous closing price.
Riverbed's shares had gapped about 10 percent higher after its last earnings report on Oct. 18. The stock then triggered bullish technical alerts about a week later when its 50-day moving average crossed above the 200-day line.
Yesterday's call buyers are looking for RVBD to gain more than 10 percent by the time they expire three weeks from tomorrow. The options could be sold earlier at a profit if the stock rallies before then, but they will expire worthless if the shares don't move. (See our Education section)
Overall option volume in the name was nearly 7 times its daily average in the last month. Calls outnumbered puts by more than 40 percent.
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