Tellabs is up 25 percent in the last three months, and at least one big investor expects the gains to continue into the New Year.
OptionMonster's tracking systems detected heavy buying of the January 7.50 calls for $0.60 to $0.70. Volume in the strike soared to 14,555 contracts, more than three times existing open interest.
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Tellabs rose 2.92 percent to $7.05 yesterday. The telecom equipment company has been climbing since reporting better-than-expected earnings and issuing revenue guidance that exceeded analysts' forecasts on July 27.
The stock needs to gain at least 16 percent by expiration for the calls purchased yesterday to turn a profit. The next scheduled event that could serve as a catalyst is the release of third-quarter results before the bell on Oct. 26.
Total options volume in Tellabs was nine times greater than average. Call volume exceeded puts by 67 to 1, reflecting the bullish sentiment.
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David Russell is a reporter and writer for OptionMonster.