By Jud Pyle, CFA, chief investment strategist for the Options News Network

Want a cheaper way to be long JDS Uniphase ( JDSU) shares? One investor used call options to bet on later-term upside, committing less capital but expressing equal bullishness.

Shares of JDSU, a California-based communication equipment producer, have gained more than 7% to $12.84 so far this morning without any company-specific news on the wires. The catalyst for this run-up is unclear, but the company might announce earnings figures around April 28. Options action during midday trading suggests investors expect the stock to rally slightly higher throughout the near term.

At 11:37 a.m. EST, more than 12,500 near-the-money June 13 calls changed hands for the ask price of 95 cents per contract. These calls are home to current open interest of 1,600 contracts, indicating investors likely bought these options to open on a bullish bet that JDSU shares could climb higher than $13.95 prior to June options expiration. The June 13 calls have gained 55 cents so far on the day, and have an implied volatility of 43%. This level compares to the stock's 30-day historical volatility of 32%.

Will JDSU shares rally more than 8% prior to June options expiration? At least one call-buyer seems to think so, and posted a total of $1,187,500 for this long call trade. These 12,500 calls give the option buyer the right to purchase 1.25 million JDSU shares at $13 (on or before expiration). The same amount of long stock would have cost the investor $125,000,000.

Jud Pyle is the chief investment strategist for Options News Network ( and the portfolio manager of Options Alerts. Click here for a free trial for Options Alerts. Mr. Pyle writes regularly about options investing for
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."