Bulls Come Back for More in BMC Software


The bulls are coming back to BMC Software.

Traders were buying in the April 40 calls on Monday, as Pete Najarian reported Tuesday, and yesterday they turned their attention to the May 45s. A single large block of 10,000 contracts priced for $0.23, followed by subsequent prints for $0.25 and $0.30, according to OptionMonster’s real-time tracking systems. Volume was more than 100 times open interest in the strike at the beginning of the session, indicating that this was fresh buying.

Calls lock in the price investors must pay for the stock, which gives them major leverage on a percentage basis in the event of a rally. Should the shares fail to move, however, those options will expire worthless.

BMC shares rose 0.65 percent to $38.75 yesterday. The corporate software maker has been trying to work its way higher since early January, but remains trapped below its 200-day moving average. Management raised earnings guidance on Feb. 1, attracting buyers to the stock.

Overall option volume in the name was 19 times greater than average in the session. Calls outnumbered puts by 44 to 1.

—Neither Russell nor Najarian has a position in BMC.

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David Russell is a reporter and writer for OptionMonster.