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Tuesday is shaping up to be a gigantic day for Salesforce. The company is expected to report earnings after the bell and may officially announce the successful purchase of workplace communications company Slack, in what is expected to be a half-cash and half-stock deal.
Options traders are betting this announcement, coupled with positive results, could propel Salesforce into the weekend.
“We’ve seen roughly twice the average daily options volume, and at the moment the options market is hinting that the stock will move just under 8%. [in either direction] by the end of the week, “Michael Khouw, chief investment officer at Optimize Advisors, said Monday on CNBC’s” Fast Money. ” This is in line with the 7.7% that the stock typically has on average. “
Many traders who bet on Salesforce on Monday were positioning themselves on the bullish side of this implied move, betting that the stock would recover sharply at the end of the week. Shares have fallen about 7% since this potential deal was first announced last Wednesday, and many traders are seeing the stock return to those levels.
“The most active options were the 250 weekly calls. Over 4,000 of these were traded, and buyers of these were obviously betting the move could be higher.”
Those calls, which expire Friday, were trading at an average price of $ 5.30 and were even about 6% higher than when Salesforce closed on Monday.
Salesforce was trading about 1.5% less in Tuesday’s session.
Warning
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