Computer Sciences Corp. (CSC) was one of five firms to score a five-year pact with the U.S. Department of Defense this week, with the cloud computing concern's slice of the proverbial pie valued at up to $95 million. As such, the shares of CSC have tacked on roughly 5% since the start of the week, luring a slew of call speculators in its wake.
In fact, the stock now sports a 10-day call/put volume ratio of 30.0 on the International Securities Exchange (ISE) and Chicago Board Options Exchange (CBOE), implying that traders during the past two weeks have bought to open 30 CSC calls for every put. What's more, this ratio registers in the 87th annual percentile, suggesting that options players have initiated bullish bets over bearish at a faster clip just 13% of the time during the past year.
Echoing that trend, CSC has already seen about 8,600 calls cross the tape so far today ? close to 85 times its expected single-session call volume. With October options expiration just around the corner, it appears the bulls are honing in on the November and December 50 strikes, which have seen roughly 3,200 and 1,200 calls change hands, respectively.
With intraday volume exceeding open interest at both strikes, and with more than 90% of the calls traded at the ask price, we can assume that a comfortable portion of today's activity consists of freshly bought bullish bets. By purchasing to open the 50-strike calls, the buyers are expecting the shares of CSC to muscle atop the $50 level by the time the options expire.
At last check, CSC has extended its recent run higher, tacking on 4% to flirt with the $48.85 level. What's more, in light of the security's recent rally, the stock is now in position to finish the month north of its 10-month moving average for the first time since April.
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