By Mike Yamamoto, managing editor of OptionMonster
NEW YORK -- Quality Systems (QSII) has been trapped in an extremely tight range for the last month, but traders are looking for the stock to break out.
OptionMonster's tracking systems detected the purchase of almost 4,000 October 20 calls Thursday, most of which priced for $1.35 to $1.50. These are clearly new positions, as open interest in the strike was just 821 contracts before the session began.
These calls lock in the price where stock can be bought in the health care IT company through mid-October. But these contracts, which will track the share price closely because they are in the money, will quickly lose value if the stock doesn't climb soon.Quality Systems' shares rose 0.38% to $21.09 on Thursday. The stock touched a 52-week high of $23.58 at the beginning of August but has been hugging the $21 level for the last three weeks. Total option volume in the name Thursday was 16 times its daily average for the last month. Overall calls outnumbered puts by 10 to 1, a further indication of the session's bullish sentiment. Yamamoto has no positions in QSII.
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