Traders turn bullish on Coupons.com
Traders are collecting calls in Coupons.com ahead of its earnings report in two weeks.
About 2,900 February 15 calls were bought for $1.19 to $1.45 yesterday, according to optionMONSTER's Heat Seeker tracking program. Open interest in the strike was just 217 contracts before the trades appeared, showing that these are new positions.
These long calls lock in the price where investors can buy a stock, which lets them position for a rally with limited capital. That can be safer than purchasing shares directly because only the cost of the options can be lost on a pullback. The calls can be sold anytime before they expire but will lose value if the stock falls. (See our Education section)
COUP fell 6.05 percent to $14.91 yesterday. The stock climbed to $20 on Jan. 9 but pulled back sharply and is now trying to hold support at its 100-day moving average. The digital-coupon company is scheduled to announce fourth-quarter results on Feb. 9, the week before yesterday's long calls expire.
Yesterday's total option volume in the name was more than 16 times its daily average for the last month. Overall calls outnumbered puts by 17 to 1, a reflection of the session's bullish sentiment.
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