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Option Bulls Think Visa Is Ready to Charge

Tuesday, 24 Apr 2012 | 6:30 AM ET

Visa’s

Visa
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Visa

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.

Visa’s

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

Additional Views: The Rising Credit Card Stock You Haven’t Heard Of

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Pete Najarianis a professional investor, CNBC contributor, regular co-host of CNBC’s “Fast Money ” and co-founder ofOptionMonster.com .

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