You know how much we love BIG call buys in tech companies. Well there was just a very large one seen in China based Ciena Corporation (CIEN) this morning.
Just a little while ago we saw a trader buy 5,076 September $19 calls. Most of those were bought at the ask. This makes for a transaction value in the area of $584,000, not too shabby. Especially when you consider that CIEN stock price was weak at the time.
Ciena Corporation (CIEN) is currently trading at $18.92 down 29 cents, on slightly higher volume than average. CIEN has a 52 week high of $27.93, and a low of $18.00 on the year. It’s traded 1.8 million shares already this morning by. It’s average daily volume is just 2.5 million. It would appear some kind of news is coming with a big buy like this, or it could be earnings data leakage.
Ciena Corporation (CIEN)announces quarterly earnings on September 2, so clearly this could be one of those high risk, high reward earnings plays. These calls are now 1.11 to 1.16, last traded at $1.15, down 9 cents on the day.
We like this trade given it’s size, the nature of the business. We’re inclined to dip our toes in this one and join the inside money on this.
Twenty three analysts currently follow Ciena Corporation (CIEN). The average rating on CIEN is a “OVERWEIGHT” and the average price target is $28.67. Cienna Corp is currently not profitable, with analysts expecting a 28 cent per share profit for this quarter, and an annual profit of 96 cents.
You don’t want to bet the farm on this one as earnings plays can go either way, but a small position would seem justified here. There’s now been almost 6,000 of the Sept 19 calls traded so clearly some others are jumping on this bandwagon.