What’s behind call selling in Oracle

Oracle is pulling back from resistance again, and one trader is looking for a cap on potential gains.

ORCL is down 0.67 percent to $30.57 near midday trading. The database company was higher this morning, on pace to surpass the 2012 closing high set two weeks ago at $30.87. Shares bounced off support and 2012 lows around $25.50 in mid-May.

optionMONSTER’s systems detected the sale of 26,599 December 33 calls for the bid price of $1.05. The volume was 10 times the previous open interest, so this is a new position.

The call selling is a bet that Oracle will be below that $33 strike price at that expiration. The options may have been sold naked, with an initial bearish bias and theoretically unlimited risk to the upside, or they could have been sold against long shares in a covered call position.

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— Option Monster

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