The shorts have been fighting Zynga, but yesterday's upside option action was tough to ignore.
optionMONSTER's Heat Seeker scanners lit up with early buyers in the November 4 calls for $0.08 and then $0.08. More than 38,000 of the contracts traded in all, almost twice the previous positioning of 20,984.
These long calls lock in the price where shares can be purchased in the provider of social games, letting investors cheaply position for a rally. They also can produce some nice leverage if the stock pushes higher. (See our Education section)
ZNGA rose 1.74 percent to $3.80 yesterday and has been holding the majority of its gains since third-quarter results were released late last month. It has many popular web and mobile franchises such as FarmVille and Zynga Poker, with more than 130 million active monthly users.
The stock hit highs above $4 on Oct. 25, and yesterday's call buying indicates that traders think those levels could be tested before the end of the month.
Total option volume in the name was triple its daily average, with calls outpacing puts by 67,000 to 9,300.
Disclosure: I own ZNGA calls.
(A version of this post appeared on InsideOptions Pro yesterday.)
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