NUAN – Nuance Communications, Inc. – Near-term call options on the software company are active today with the release of the firm’s second-quarter earnings close at hand. Nuance’s shares declined 1.90% by 12:35 pm ET to stand at $17.10. Investors appear to be both buying and selling out-of-the-money calls today in order to prepare for the earnings report after the market closes on Monday August 9, 2010. Some traders appear to be making bullish bets, buying approximately 2,200 August $17.5 strike calls at an average premium of $0.53 each. Call buyers make money if NUAN’s shares rally 5.4% over the current price of $17.10 to trade above the average breakeven point on the upside at $18.03 by August expiration day. Other investors sold 2,200 calls at the same August $17.5 strike for an average premium of $0.53 each. Call sellers keep the premium received on the sale of the calls as long as Nuance Communications’ shares fail to exceed $18.00 by expiration. NUAN’s shares last traded above $18.00 back on May 5, 2010.
Affiliation: Interactive Brokers
Andrew Wilkinson is the senior market analyst at Interactive Brokers Group, where he provides daily commentary and analysis on U.S. equity options trading throughout the trading day. Andrew provides webinars designed to explain option-related trading scenarios covering futures, fixed income, forex and equities.
Interactive Brokers: Interactive Brokers offers direct market access to around 80 electronic global markets from a single account. Successful traders and investors understand that superior technology and lower trading costs can result in greater returns. For 32 years we have been building direct access trading technology that delivers real advantages to professionals worldwide. With consolidated equity capital of US $4.4 billion, IB and its affiliates exceed 1,000,000 trades per day. In addition, our prudent and conservative risk policies make Interactive Brokers a safe haven for your money. Discover some of the reasons why IB, the largest independent US broker/dealer, is the professional traders' and investors' choice.
Visit: Interactive Brokers