Houghton and Atkeson

Call Selling High in Apollo Group (APOL)

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The options activity in Apollo Group (APOL) is interesting to note.

The APOL March 95 Calls (OAQCS) have traded 17,000 times, and it appears that market participants are collecting premium by selling these calls at 55 cents to 60 cents.

APOL options trade almost 14,000 contracts daily, but to have this much action in one strike is significant. With open interest at 2,388, we would anticipate the vast majority of these trades to have been opened.

The private education provider has been at the head of the class in the market during the past nine months, up 65% in that time. APOL is up this year 3% alone. The stock, currently trading at $79.20, hit a 52-week high of $90 just a month ago.

The company is scheduled to report its second-quarter earnings on March 23, after the March options expiration on March 20.

Although this is not a bullish trade, the sentiment is not overly bearish. A good bet is that a large holder is collecting some premium and does not think the stock will advance more than 20% in the next month. With the all-time high of $98.01 set back in 2004, this seems like a good strategy.

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