Teradata Draws Upside Trades

By David Russell, reporter at OptionMonster

NEW YORK -- Cloud-computing stocks have been active recently, and Tuesday the bulls turned to data-warehousing company Teradata ( TDC).

OptionMonster's tracking systems detected an early volume spike in the June 60 calls, with large blocks crossing for 80 cents and 85 cents. Those contracts lock in the price where the stock can be purchased, which can result in some nice leverage in the event of a rally.

That's what happened Tuesday. Teradata traded around $56.90 when the calls pushed higher before eventually closing the session up 2.88% at $58.24. The options, meanwhile, inflated more than 50% to $1.30.

Teradata's last earnings report in early May was weak as management cited customer "belt tightening." It touched a 52-week low on an intraday basis after that release but then reversed and has been steadily climbing ever since.

Total option volume was five times greater than average in the session, with calls outnumbering puts by a bullish 17-to-1 ratio.

Data-center stocks including EMC and NetApp have also seen bullish activity in recent sessions.

Russell has no positions in TDC.

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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