NEW YORK -- The options got cheap in Riverbed Technology
(RVBD) on Thursday and buyers stepped in.
OptionMonster's trade scanners showed heavy trading in the December 15 calls for 68 cents. More than 6,000 were purchased against previous open interest of just 2,690 contracts, so new money was definitely put to work on the long side.
These calls lock in the price where the stock can be purchased, giving investors cheap exposure to a rally and some nice leverage if one occurs.
Riverbed, a computer-networking company that provides solutions for enhanced information-technology performance, climbed 0.61% to $14.82 Thursday. It reported earnings earlier this week, beating on profit but missing revenue expectations. The stock ran higher and has been holding near $15 since.
Implied volatility has really come out of the options since results came out and is now below the 30-day historical volatility. That means the options are cheap, so it makes sense to use them to get long.
More than 25,000 contracts traded overall, more than four times greater than average. Overall calls outpaced puts by 21,700 to 4,100, a reflection of the session's bullish sentiment.
Najarian owns long calls in RVBD.