Red Hat, Inc (RHT) is a global software company. The company’s stock is currently trading around $49.10 in a 52 week range of $41.89-$61.45. The stock has been underperforming the market this year with shares of RHT falling over 12% year to date. Despite the weakness in RHT stock, options traders are relatively bullish the name as large blocks of calls are hitting the tape today. Earlier this morning a trader bought 8,557 RHT Jun 52.5 calls for $0.80. This is a very bullish trade that requires this trader to lay out nearly $685,000 in capital. This block also represents the largest order to trade in RHT on a day where options volume is over 4 times the average daily volume. Although the stock is trading below the Ichimoku Cloud order flow this strong could be providing a signal for a long opportunity.
Block Trade: A trader bought the RHT Jun 52.5 Calls for $0.80
Risk: $80 per 1 lot
Reward: Unlimited
Breakeven: $53.30
James Ramelli
KeeneOnTheMarket.com
