Visa: Bullish Bets Leading into Earnings

By David Russell

At least one big investor is bullish on Visa (V) ahead of the company's next earnings release.

optionMONSTER's tracking systems detected the purchase of 10,000 August 60 calls for $2.70 and $2.75, matched against the sale of 10,000 August 60 puts for $3.30. Volume was more than three times open interest in both strikes.

The so-called risk-reversal trade generated a credit of $0.575 and will earn unlimited returns if the shares move higher. The strategy, an unhedged one-way bet, also runs the risk of generating losses if V closes below $59.425 at expiration.

V is down 0.47 percent to $59.58 in late morning trading. The next catalyst that could move the credit-card company is the release of fiscal-third quarter results on July 29.

The trade on V today accounted for 85 percent of the options volume in the name.

(Chart courtesy of tradeMONSTER)

Comments

[island bear:]

Or they could have been short the stock... be careful with assumptions.

Jul 13 02:51 PM