by Andrew Houghton and Nick Atkeson 05/07/08
Every few days during the past month, we have seen heavy options flow in Starent Networks (STAR).
Today, with investors buying about 3,000 of the STAR Sept 15 Calls (QTQIC) and almost 3,000 Sept 17.50 Calls (QTQIW) with the stock trading at just over $15, we were unable to keep this observation to ourselves any longer.
Initially, much of the call buying was with a May expiration, which we believed too short a time to make actionable. But when the option investors moved their expiration out to September on this most recent trade, we believe this marks a higher level of conviction in the idea.
After the extended options buying spree, there are now over 36,000 call contracts open versus less than 3,000 put contracts for all of the options on this company.
The company makes hardware and software systems to enable mobile operators to deliver multimedia services to their subscribers. This sounds like a hot idea, given Apple's (AAPL) recent success with the iPhone and the company's most recent quarter, where it reported better-than-expected earnings, revenues, gross margins and forward guidance.
For more fresh options trading ideas from Andrew and Nick, click here.
