It’s been a busy week for unusual options trades so far this week, but will it continue into Wednesday? Well it’s too early to tell yet, but we have seen a couple interesting trades, with one being in the options of Activision Blizzard, Inc. (ATVI).
One trader has a strong “gut feeling” that Activision Blizzard, Inc. (ATVI)is going higher by late September. The trader bought a 3,578 ATVI September $23 calls. They paid 56 cents for those calls, mostly at the ask. That makes for a nice sized short term bet of just over $200,000.
Activision Blizzard, Inc. (ATVI) is currently trading at $23.08 up just 7 cents today, and trading slightly down from it’s higher near the open today. ATVI has a 52 week high of $23.79, and a low of $16.02 on the year. It’s trading normal average volume with 700,000 shares trading by 10:15 am today.
Activision Blizzard, Inc. (ATVI)alreadyannounce quarterly earnings back on August 5, so clearly this is not one of those short term earnings plays here. The company is scheduled to announce Q3 earnings on November 4, 2014. It’s obvious this trader expects some good news related to the company well before the September calls expire.
So what does this trader know that no one else seems to know? Maybe a new upgrade to their flagship game, or maybe a whole new game announcement? Or, as is usually the case, it could just be the usual analyst upgrade leak.
Twenty eight analysts currently follow Activision Blizzard, Inc. (ATVI). The average rating on ATVI is “BUY” and the average price target is $26.20. ATVI shares are trading at a PE of around 24.5 now, with a PE for next year forecast at 16. There is some wiggle room for a big analyst upgrade and/or price target increase in the very near future. There have been a handful of recent price target bumps in ATVI, but from smaller firms. The last analyst action was August 20, when Arugus boosted its price target $30 from $24.00. It’s just a guess, and nothing but a guess, but we’ll guess that Credit Suisse will come out and announce a big price target increase from their current target of $25.00.
We like this one and will try to nickel and dime and get in around the price that the insider bought at.