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Option Brief: Cisco Systems, Inc. (NASDAQ:CSCO) was hit with a barrage of bullish trading activity yesterday, as around 100,000 calls crossed the tape -- almost double the equity's average daily call volume. By comparison, just 45,000 puts were exchanged during Monday's session.
Snagging the lion's share of the attention was the January 2014 22 strike, which saw 27,055 calls change hands -- 83% of which did so at the ask price, signaling buyer-fueled activity. Meanwhile, open interest spiked by 17,140 contracts overnight, confirming the initiation of new long positions.
By purchasing the calls to open, the speculators are betting on CSCO to muscle north of the $22 mark by the close on Jan. 17, 2014, when these front-month options expire. This denotes a rise of 2% from yesterday's closing price of $21.57, as well as territory not explored since Nov. 13 -- the day before a guidance-related bearish gap.
Technically speaking, Cisco Systems, Inc. (NASDAQ:CSCO) hasn't had much to write home about, as the shares have advanced less that 10% year-to-date. Adding insult to injury, the tech concern has lagged the broader S&P 500 Index (SPX) by 15.7 percentage points during the past three months.