Traders Betting for Big Moves in the Optical Space

• stevenplace
• November 30th, 2011

Big Speculation

Finisar ($FNSR) reports earnings after the bell today, and there has been some pretty speculative options action during this time.

Yesterday $FNSR traded about 4,200 calls on the day, compared to an average of about 3,700.

This may not seem noteable, but the thing that sticks out is that 78% of those calls were bought on the ask.

The majority of the action was focused on the Dec 20 and 21 calls– the open interest today will tell us if these were opening orders.

Bullish Tape on Competitors

On top of that, JDS Uniphase ($JDSU), a company that operates in the same space as $FNSR, saw some strong options action as well.

In $JDSU we saw 12,000 calls traded compared to an average volume of 6,100. 67% of these calls were bought on the ask.

The action was centered around the December 12 calls, with a volume of 9,000 compared to an open interest of 5,500.

This options order flow is very aggressive. It is near month, out of the money, and going into earnings.

Huge Order

To finish it off, we see another company in the same area Avago Tech ($AVGO), which reports after the bell tomorrow.

A single order of 8,600 calls traded on the Dec 30 option, against an average volume of 1,000.

This may seem really bullish, but this was most likely tied to stock, as 380,000 shares traded at the same time.

A call-overbuy is a trade that is very bullish on volatility. So most likely the trader of these calls is looking for a sharp move in the stock going into earnings.

 

 

The information in this blog post represents my own opinions and does not contain a recommendation for any particular security or investment. I or my affiliates may hold positions or other interests in securities mentioned in the Blog, please see my Disclaimer page for my full disclaimer.

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