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Last night, Palm (PALM – 56) reported fiscal first-quarter earnings of four cents per share, topping Street estimates by two cents per share. This news prompted a brokerage firm to upgrade its rating on the stock from a "buy" to a "strong buy." The shares are trading up seven percent on this news. PALM has recovered nicely after bottoming in late May. Since that low, the equity has appreciated by a hefty 180 percent.
Yesterday, approximately 6,500 contracts were added to the October 55 call ahead of today's earnings announcement. Today, this option is again the focus of activity, as almost 5,000 contracts have changed hands. This activity could represent some profit taking on the 8,525 contracts that are open at this strike.