Cypress Bioscience Among Bullish Options

Ciena

By Chris McKhann, analyst at OptionMonster.

In this light-volume first session of 2009, the largest trade of the day so far is a bullish spread in Ciena (CIEN Quote).

The communications networking company remains in an increasingly tight range, despite being up 2.5% on the day. CIEN is trading at $6.87 this morning, hovering above the low of $5.07 from late November but still roughly 80% off the 52-week high set back in April.

The trade is a spread involving the January and February 7.5 calls, with a block of 10,000 of each changing hands within seconds, according to OptionMonster's tracking systems. This could be a calendar spread but with open interest at 12,365 in January, it is likely a roll-out of a bullish position from January to February to allow more time for the trade to work.

The implied volatility of CIEN is 121%, down off its recent highs. The implied volatility of the January 7.5 calls is 83 and February is 79, giving a slight advantage to the roll-out. The stock needs to be above $8 for the trade to be profitable at expiration, but it was as high as $10 at the beginning of November.