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Trade gives VeriFone room to run

David Russell (david.russell@optionmonster.com)

VeriFone Systems has been rallying since the summer, and one investor is giving it more room to run.

optionMONSTER's tracking systems detected the purchase of 5,500 February 27 calls for $1.90 and the sale of an equal number of March 29 calls for $1.60. Volume was below open interest in the 27s, which indicates that an existing short position was closed and rolled forward in time.

The investor probably owns shares in the maker of credit-card payment systems and had previously sold the February contracts as part of a covered-call strategy . Adjusting the strategy cost $0.30 but raised by $2 the price at which the trader must unload their stock. He or she also committed to an additional month in the trade. (See our Education section.)

PAY is down 3.72 percent to $27.91 in afternoon trading but is up 67 percent since last June. That rebound came amid improving earnings and followed a huge selloff in the preceding 14 months.

Total option volume is more than quadruple the daily average so far in the session, with calls outnumbering puts by a bullish 39-to-1 ratio.

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