TD Ameritrade Holding Corporation (AMTD) is a securities brokerage and retail financial services company. The company’s stock is currently trading around $28.80 in a 52 week range of $15.20-$29.25. The stock has been massively outperforming the market this year having added over 71% to share prices year to date. Unusual activity today in the options market suggests that traders believe this rally will continue through next year. Early in today’s trading session a trader bought 6,800 AMTD Jan 2015 35 calls for $1.20. This is a $816,000 bet on further upside in AMTD and represents this traders high level of bullish conviction in AMTD. This block also trades at volume 4.7 times the average daily option volume in AMTD. The chart supports such a play in AMTD with shares trading just off their 52 week high and well above the Ichimoku Cloud. The future cloud is also upward sloping indicating the potential for further upside in AMTD. With the strong technical and very bullish order flow we believe that AMTD is setting up well for a long term trade.
Trade: Buying the AMTD Jan 22 Calls for $7.65
Risk: $765 per 1 lot
Reward: Unlimited
Breakeven: $29.65
These deep ITM calls will trade very much like a long stock position and have a breakeven only $0.85 higher than current levels.
