* Bulls target Symantec Sept $16 call options
* Symantec August options imply about 5.5 pct earns move
* Overall options action is 4.1 times greater than norm
By Doris Frankel
CHICAGO, July 28 (Reuters) - A number of option players appeared on Wednesday to be banking on a big price move when business software maker Symantec Corp SYMC.O reports quarterly earnings after the close.
Shares of Symantec slipped 1.27 percent to $14.80 during the afternoon session on the Nasdaq. By early afternoon, August option prices were implying about a 5.5 percent move in Symantec around earnings, said Steve Quirk, managing director of trading at TD Ameritrade.
In the options market, many bullish traders picked up out-of-the-money call options giving them the right to buy Symantec shares at $16 apiece by September expiration.
The strike traded more than 26,307 times, far exceeding open interest of 1,986 contracts, the number of existing positions held by investors, indicating new positions were put on, according to Reuters data.
One large call purchase appeared to be tied to a stock position in a so-called delta neutral trade, a hedged strategy that is a bet on volatility as opposed to the direction of the underlying stock.
“A large trader bought over 18,000 September $16 calls for an average premium of 35 cents per contract and appear to have simultaneously sold 540,000 shares of stock between $14.90 and $14.93,” said Steve Place, a founder of Web information site investingwithoptions.com in Mobile, Alabama.
“This is a bullish volatility bet going into earnings,” Place said. “The investor will profit if there is a very strong move in Symantec in either direction by September expiration.”
Wall Street is expecting Symantec to report fiscal first-quarter profit of 35 cents per share on revenue of $1.47 billion, according to Thomson Reuters I/B/E/S.
In May, Symantec reported 40 cents per share profit on revenue of $1.53 billion for the fiscal fourth quarter, ahead of Wall Street estimates. The next day, the shares rose 1.7 percent.
Overall options volume in Symantec was 4.1 times greater than average daily levels, with about 35,000 calls and 2,156 puts crossing the tape by late afternoon, according to options analytics firm Trade Alert.
An equity call option conveys the right to purchase shares at a fixed price up to a certain date while a put option grants the right to sell shares at a fixed price any time until expiration. (Additional reporting by Bill Rigby in Seattle; Editing by Dan Grebler)