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Call buyers roll their positions out to live another month
Beth Gaston Moon is the Senior Editor for the Options News Network. Beth was a member of the research department at Schaeffer's Investment Research for more than a decade. February 4, 2010 9:20 EST Related Symbols: RIMM
Shares of Research in Motion Limited (NASDAQ:RIMM) got a boost yesterday after a judge in the United Kingdom ruled that RIMM did not, in fact, infringe on a patent held by Motorola (NYSE:MOT). MOT and RIMM had a four-year license agreement that expired in 2007 and since then, the companies have been suing one another. This particular allegation related to an email gateway system.
Cheered by this modest victory, RIMM shares tacked on 3.4% in Wednesday’s trading to close at $67.86. The February 70-strike call, still out-of-the-money by 3%, saw some attention during the session, as more than 18,000 contracts changed hands. Open interest was little changed at 31,451, suggesting that some of this volume may have traded to open while other contracts traded to close.
The March 70 call saw volume of 16,000 hit the tape, a chunk of which translated into new open interest. At the close, this call was up 93 cents to $2.56, roughly on par with what its delta would suggest. It looks as though at least some of these traders were rolling out front-month positions to the March series. The February 70 calls are still out-of-the-money, with two weeks and two days until expiration; the March series offers a bit more time for the bullish case to unfold.
Yesterday’s jump in the stock powered the shares back above short-term technical resistance around the 66 area. The shares are also close to filling in the bull gap created on December 18th, when the company last reported quarterly earnings.
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