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November 21, 2009
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Riverbed Technology (RVBD)
April 17, 2009ACTION:
Buy the RVBD May 17.50 Calls (UEXEW) for 80 cents or better
Dear Fellow Options Traders,
Options in Riverbed Technology (RVBD) are trading seven times normal volume. One explanation for the volume is renewed speculation on trading desks that Cisco Systems (CSCO) will purchase RVBD for $27.
Riverbed has developed a solution to the fundamental problems of wide-area distributed computing. Riverbed's WAN optimization appliances make existing pipes perform better. Whether the rumors of being acquired are accurate even by another suitor like Hewlett-Packard (HPQ) or it is a play on their earnings next week, we have to take note of the aggressive option trading action today.
With the stock at $15.50, the RVBD May 17.50 Calls (UEXEW) have traded 15,000 times, representing 60% of the call volume, which is 25,206 to 4,290 puts. Market participants have also traded 4,800 RVBD May 20 Calls. The volume today is 50% of open interest.
We recommend buying the RVBD May 17.50 Calls (UEXEW) for 80 cents or less.
Have a great day trading.
Nick Atkeson and Andrew Houghton
Editors
Options Trader
