JDSU, FEYE Options – Unusual Trading Activity – September 8, 2014
This week we’re taking a look at unusual options trading activity in JDS Uniphase (JDSU) and FireEye (FEYE).
As many of you know, unusual options volume can be a valuable indicator as to what traders are thinking, and more importantly, where these stocks are heading in the short-term.
This is something professional options traders pay a lot of attention to, and for good reason… Unusual options activity can “tip off” big moves in a stock, either up or down.
So let’s take a look at some ‘interesting’ activity that caught our eye this week:
JDS Uniphase (JDSU)
Bullish options action in JDSU suggests the shares could be set for a turnaround.
JDSU is currently trading for $11.58, down 14% on the year. The price is 13% above the 52-week low of $10.29 and is 30% below the 52-week high of $16.61.
About 2,500 December 12 calls traded today in JDSU, much higher than the average volume. The calls traded between $0.58 and $0.66, so the stock price would need to climb about a $1 for this trade to break even.
JDSU hasn’t done very well over the last year, but the stock price is up about 3% today and is approaching the 200-day moving average. Traders could be betting that the rally will continue if the important moving average resistance level is breached.
FireEye (FEYE)
At least one trader is betting that FEYE’s steep decline has hit a bottom.
FEYE is trading for $33.30, down 27% year-to-date. The shares are 66% below the 52-week high of $97.35 and 30% above the 52-week low of $25.58.
Over 2,000 December 31 puts have traded so far today – well over the open interest of just around 500. This opening trade appears to be a sale of the puts for a hefty premium of $3.20.
The trader must be fairly confident the stock price will hold for the rest of the year, because FEYE has certainly been a volatile stock this year. That’s why the premium is so high… of course, the greater the risk, the greater the return. So it goes.
More Options Ideas…
That wraps up this week’s unusual options trading and volume…
Keep in mind, there’s a lot more unusual options activity going on than what we discuss here.
We just try to bring you what we feel are the most significant ones– and the ones you might actually be able to make some money on!
So keep an eye on your email inbox… we have a lot more options trading ideas coming your way!
Yours in Profit,
Gordon Lewis
Category: Unusual Options Trading Activity
