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Bulls Plug Into F5 Networks

 
By David Russell of OptionMonster
 
NEW YORK -- Network-technology stocks have been strong of late, and now the bulls are turning to F5 Networks (FFIV).
 
OptionMonster's tracking systems detected heavy buying in the April 100 calls, which traded more than 10,800 contracts for $3.25 to $4.30 on Monday, including a single block of 5,582 that went for $3.60. These are clearly new purchases, as open interest in the strike was just 386 contracts before the session began.
 
These long calls lock in the price where the stock can bought through mid-April no matter how far it might climb. They could be sold earlier at a profit if premiums rise with a rally before then, but the contracts will expire worthless if shares remain below $100.
 
F5, which reports earnings on Jan. 22, rose 3.94% to $92.01 on Monday. The company beat estimates in its last quarterly release in October, but the stock has been lagging since early 2011.
 
Total option volume in the name topped 29,400 contracts on Monday, nine times its daily average for the last month. Overall calls outnumbered puts by more than 6 to 1, reflecting the session's bullish sentiment.
 
Russell has no positions in FFIV.

This commentary comes from an independent investor or market observer as part of TheStreet guest contributor program. The views expressed are those of the author and do not necessarily represent the views of TheStreet or its management.

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