Stock/Volume Alert Seen in Brocade (BRCD)

Posted in General, Options 
November 10th, 2009

Brocade Communications Systems, Inc. (NASDAQ: BRCD) saw its shares make a fairly decisive move higher today after 1:00 PM EST.  While shares did peter out and have backed off highs, Brocade’s stock just gave a volume alert at 22 million shares versus a 20 million shares per day average.  Earnings are on November 24, but the company is also one which is deemed as a sale candidate or buyout bait.  The stock is now flat at $9.24 and had been as high as $9.45 before shares rocketed up from $9.10.

Stock options trading might be part of the culprit here as we have now seen 9,152 contracts of the NOV-2009 $9 CALLS trade versus open interest of over 46,000 contracts.  There were also over 1,600 of the NOV-2009 $11 CALLS traded today versus an open interest of over 33,000 contracts. The DEC-2009 $9 CALLS saw 1,844 contracts trade versus 7,605 contracts in the open interest.  And the JAN-2010 $10 CALLS traded 2,853 contracts versus and open interest of 39,939 contracts.

There are some rumors ongoing (or shall we say ‘again’) but this may have been tied to an analyst upgrading a price target on channel checks.

JON OGG

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