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Option Brief: Calls are trading at a 59% mark-up to the average intraday pace in Cisco Systems, Inc.'s (NASDAQ:CSCO) options pits today, as roughly 83,000 of these contracts have crossed the tape thus far. Moreover, with CSCO shares up 1.6% today to $22.64, it appears a number of speculators are turning their attention to the $23 level, a barrier the stock has not surpassed since mid-November.
To be specific, the most active option of the day is the April 23 call, where more than 13,500 contracts -- including a block of 5,036 -- have changed hands. Because the majority of the contracts went off closer to or at the ask price, and implied volatility has ticked higher, it is likely long bullish positions are being initiated here. In other words, speculators are buying to open calls, expecting CSCO to climb atop the $23 mark by April options expiration in nine weeks.
Today's call players have reason to believe Cisco Systems, Inc. (NASDAQ:CSCO) will move higher in the near term, considering the shares have tacked on roughly 12% from their Dec. 13 intraday low of $20.22. Yesterday, the stock experienced an earnings induced bearish gap, but has since rebounded back into pre-earnings territory. Still, should CSCO fail to make the anticipated gain, the most today's speculators stand to lose is the initial premium paid.