By Mike Yamamoto, managing editor of OptionMonster
NEW YORK -- Fortinet (FTNT) has drawn upside option activity several times in recent months, and the bulls came back for more Wednesday.
More than 3,100 December 22 calls were bought for $1.25 to $1.40, according to OptionMonster's real-time tracking systems. Open interest in the strike showed just 256 contracts before the session began, so Wednesday's action was fresh buying.
These calls lock in the price where traders can buy the stock no matter how far it might rise through mid-December. The options could be sold earlier at a profit if premiums gain with a rally before then, but the contracts could expire worthless if the stock remains below $22.Shares of Fortinet rose 0.95% to $20.18 Wednesday. The network-security company drifted lower after reporting second-quarter results at the end of July but has been hugging the $20 level since last Friday, trading just below its 200-day moving average along the way. Total option volume in Fortinet topped 7,300 contracts Wednesday, more than triple its daily average for the last month. Overall calls outnumbered puts by 15 to 1, a reflection of the session's bullish sentiment. Yamamoto has no positions in FTNT.
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