Symantec Sees Bullish Move

One investor expects the stock to rally over the next three months.
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NEW YORK (

TheStreet

) -- Shares of

Symantec

(SYMC) - Get Report

were rallying Tuesday following a FBR Capital Markets report last week that expects strong demand this year in the security software sector.

At least one investor bought calls on a bullish bet that the stock could continue to climb until its April options expiration.

SYMC is scheduled to announce earnings figures on Jan. 27 after the market closes, and analysts estimate earnings of 37 cents per share for the quarter.

Out of the gate this morning, more than 6,300 April 19 calls crossed the tape at an ask price of roughly $1. These calls are home to current open interest of 5,400 contracts, indicating investors most likely traded these options to open. The April 19 calls have gained five cents on the day and have an implied volatility of 29% compared to the 30-day historical volatility of less than 16%.

The breakeven on this trade is $20 (strike price plus the premium paid), meaning call buyers are looking for at least 5% of upside throughout the next few months to make money on this purchase. Remember, if SYMC shares pop significantly throughout the next four months, investors could choose to sell back the calls to book profits ahead of expiration.

Call buying such as this is not the only reason for investors to go long SYMC shares, but it looks like at least one investor is calling for more upside long after the company's earnings announcement in seven days.

-- Written by Jud Pyle in Chicago

At the time of publication, Pyle did not have a position in the stock mentioned. Jud Pyle, CFA, is the chief investment strategist for Options News Network. Pyle started his career in finance in 1994 as a derivative analyst with SBC Warburg. After four years with Warburg, Pyle joined PEAK6 Investments, L.P., in 1998 as an equity options trader and as chief risk officer. A native of Minneapolis, Pyle received his bachelor's degree in economics and history from Colgate University in 1994. As a trader, Pyle traded on average over 5,000 contracts per day, and over 1.2 million contracts per year. He also built the stock group for all PEAK6 Investments, L.P. hedging, which currently trades on average over 5 million shares per day, and over 1 billion shares per year. Further, from 2004-06, he managed the trading and risk management for PEAK6 Investments L.P.'s lead market-maker operation on the former PCX exchange, which traded more than 10,000 contracts per day. Pyle is the "Mad About Options" resident expert. He is also a regular contributor to "Options Physics."