Cybersecurity software firm SentinelOne (S) is up 21% over the past year. One trader sees a further rally for shares in the coming five months.
That’s based on the November $22 calls. With 141 days until expiration, 5,044 contracts traded compared to a prior open interest of 135, for a 37-fold rise in volume on the trade. The buyer of the calls paid $1.40 to make the bullish bet.
SentinelOne shares recently traded for just under $19, meaning the stock would need to rally by $3, or about 15%, for the option to move in-the-money.
While the stock is up over the past year, and is currently heading higher, it’s still well off its 52-week high of $30.76.
Cybersecurity stocks have been out of favor with the market more focused on AI opportunities. While SentinelOne hasn’t made a profit over the past year, things are looking up, with revenues jumping nearly 40%. And cybersecurity spending is expected to continue trending higher.
Action to take: With shares starting to trend higher over the past few weeks, investors may want to consider playing that momentum now.
For traders, the November $22 calls have plenty of time for the current uptrend to play out. The options stand a strong a strong chance of moving in-the-money, and traders can likely see mid-to-high double-digit returns.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any company mentioned in this article.