Calls lock in the price investors must pay to buy shares, so they can deliver major leverage in the event of a rally. They can also expire worthless if the stock doesn’t move.
Oracle shares ended the session up 1.22 percent to $26.46. Earlier this month shares bounced at the $25.50 area, a support level that goes back to August 2011.
Almost 40,000 options traded in the session, twice the daily average for Oracle. Calls outnumbered puts by a 2-to-1 ratio, a reflection of the session’s bullish sentiment.
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Pete Najarian is a professional investor, CNBC contributor, regular co-host of CNBC’s “Fast Money” and co-founder of OptionMonster.com. Najarian has no positions in Oracle.