On Friday, OptionMonster’s systems showed that 22,000 Riverbed calls traded with heavy buying. On Monday of last week, the total exceeded 15,000, and earlier in the month more than 10,000 crossed our systems. Yesterday, the Feb. 30s and March 32s were active, calls that expire Friday, so those traders are looking for a pop in a hurry.
Long calls lock in the price investors must pay to buy shares. That provides significant leverage if the stock rallies, but the contracts will end up worthless if the stock fails to move.
Shares of the company , whose Steelhead products enable customers to improve the performance of applications and access data across networks, rose 2.5 percent to $28.24 yesterday. Calls outnumbered puts by more than 2 to 1.
—Najarian owns RVBD calls.
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Jon ‘DRJ’ Najarian is a professional investor, CNBC contributor, and cofounder of OptionMonster.com.