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Bull buys into FEI ahead of earnings

Chris McKhann (chris.mckhann@optionmonster.com)

FEI Company is attracting a large bullish trade ahead of its earnings report tomorrow.

optionMONSTER systems show that more than 20,000 options traded in the nanotechnology company on Friday, compared with a daily average of just 2 contracts and total open interest of 297. A single position dominated the action.

optionMONSTER's Heat Seeker system shows that a trader bought 10,000 September 65 calls for the ask price of $4.80 on a very wide bid/ask spread and sold 10,000 September 75 calls for $1.20. This vertical spread cost $3.60, which is the maximum amount that can be lost if shares remain below $65 at expiration in mid-September. The maximum profit would come with FEIC above $75. (See our Education section)

FEIC fell 2.45 percent to $62.63. Shares have run up from support at $50 since mid-November, hitting an all-time high of $65.87 on April 10.

The company is scheduled to report first-quarter results after the market closes tomorrow .

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