Shares of Teradata have lost about a quarter of their value in the last four months, but one trader is looking for the stock to break above its current resistance level in the next few weeks.
optionMONSTER's Heat Seeker system detected the purchase of 1,000 January 65 calls for $0.60 in 4 seconds during the final minutes of Monday's session. This is a new position, as its volume was above the strike's open interest of 616 contracts at the beginning of the day.
TDC rose 1.98 percent to $61.89 on Monday but remains about 24 percent below its 52-week high of $80.97 reached on Sept. 7. The data-storage company bounced sharply off a 10-month low near $56 early this month and was rated "outperform" by RBC Capital on Dec. 14, but the stock hit resistance at the $64 level on Dec. 20 and has been trending lower with its 50-day moving average for more than a week
Monday's long calls , which lock in the price where the trader can buy the stock, are looking for TDC to gain more than 6 percent by expiration on Jan. 18. The options could be sold earlier if their premiums rise with any rally before then, but these calls will expire wortheless if the shares don't move. (See our Education section)
The trade made up almost all of TDC's total option volume of 1,135 contracts on Monday, which was triple its daily average. Calls outnumbered puts by 25 to 1, a reflection of the bullish sentiment.
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