Zynga Inc (NASDAQ:ZNGA) has been seeing a lot of upside options over the last few days, according to Pete Najarian of OptionMonster (via The Street). He reports that their scanners “lit up with early buyers” on the Nov. 4 calls for 8 cents. According to Najarian, over 38,000 of those contracts traded, which is almost twice the previous amount, which was 20,984.


Zynga investors prepare for a rally

Calls are an option which enable investors to lock in a price at which shares of Zynga Inc (NASDAQ:ZNGA) can be purchased. Investors who believe the stock is going to increase purchase these options because they can buy shares for a lower price by a certain date. This enables them to position themselves for a rally at a lower price than what they would pay if shares did rally. And if Zynga shares increase even further, they are able to produce leverage.

Zynga shares on the rise

Since Zynga Inc (NASDAQ:ZNGA) released its latest results late last month, shares have risen. They gained almost 2% during the regular trading day on Tuesday and almost another 1% in premarket trading on Wednesday. Most of the gains recorded by the social game maker have been retained.

Shares of Zynga hit a new high over $4 a share on Oct. 25, and according to Najarian, the call buying on Tuesday suggests investors believe that the company’s shares could test that level again, if not exceed it, by the end of this month.

He reports that total option volume in Zynga Inc (NASDAQ:ZNGA) was triple the company’s daily average. Calls greatly outpaced puts, with 67,000 calls trading compared to just 9,300 puts trading on Tuesday.

Analysts on Zynga

Analysts have been providing their take on Zynga since the company’s latest earnings report. Some note that more clarity regarding the game maker’s future is needed, while others remain sure that Zynga Inc (NASDAQ:ZNGA)’s future looks brighter in 2014.