Option Bulls Think Visa Is Ready to Charge
earnings are more than a week away, but traders are already positioning for good news.
Almost 35,000 options traded in the name yesterday, compared with a daily average of fewer than 6,000 contracts. Total calls outnumbered puts by almost 2 to 1.
The most active strike by far was the May 120 calls, which saw more than 11,000 contracts trade. The largest block priced for $2.55, and they ended the session at $2.70 to $2.75, according to OptionMonster’s real-time tracking systems.
Those callslock in the price that traders must pay for the credit-card stock. The contracts will leverage a move to the upside, but will expire worthless if the stock fails to rally.
Visa shares closed at $118.10 yesterday, down 2.4 percent. It got taken to the woodshed earlier and was down at nearly 3 percent at one point during the session.
The company is scheduled to report quarterly earnings on Wednesday, May 2. Rival American Express recently released first-quarter results that exceeded expectations on strong spending by cardholders. In addition, cuts to rewards and promotion costs kept expenses in check.
—Najarian owns V calls.
Additional News: MasterCard, Visa Warn of Possible Security Breach: Report
- More Options Tips From Pete Najarian
- Options Tips From Jon Najarian
- Read the CNBC Stock Blog
Options Trading School: