Acme Packet reported earnings yesterday afternoon, and the bulls were hoping for strong results.
The numbers were mixed, with profit and revenue for the second quarter beating analysts' forecasts, but guidance was worse than expected. Shares at one point lost as much as 8 percent in extended trading but then rebounded to little-changed.
optionMONSTER's Heat Seeker tracking system detected a bullish three-way trade during the regular session. The investor bought 2,470 August 62.50 calls for $3.98 and sold equal-sized blocks in the August 77.50 calls for $0.48 and the August 50 puts for $1.15. Volume was more than double open interest in all three strikes.
The trade cost $2.35 to implement and will earn a maximum profit of 538 percent if APKT closes at or above $77.50 on expiration. It won't lose money beyond the cost as long as shares remain above $50.
The maker of telecommunications controllers was one of the hottest stocks since the mortgage crisis, surging from under $3 in late 2008 to over $80 by April. Since then it's been drifting lower, but now seems to be finding support around $60.
APKT fell 5.58 percent to $60.10 in regular trading. Investors also bought an additional 3,300 August 62.50 calls, mostly for $3.80 to $5, looking for a pop after earnings. It was the second straight report that profit beat expectations but guidance disappointed.
Overall option volume in the session was 18 times greater than average in yesterday's session.
-0.72