Stocks quoted in this article:
Telecommunications equipment maker Redback Networks (RBAK – 100-3/4) announced on Wednesday that its second-quarter earnings came in at two cents per share, topping brokers' estimates calling for a two-cents-per-share setback. This morning, RBAK's "strong buy" and "buy" ratings were reiterated by two different brokerage houses.
The stock has reacted negatively to these developments, gapping 1-1/4 points lower at today's open. The equity is presently in the red by over 11 points, or just more than 10 percent, to reach its lowest intraday level since June 1. RBAK, which is trading back below its 10-month moving average, has declined by over 41 percent since its September 29 intraday high.
In the security's options pit this morning, the deep-out-of-the-money October 140 call is leading the way on volume of 745 contracts. This strike has open interest of 2,338 contracts, indicating that this activity could result in some liquidations.