Market News

January 9, 2017  Mon 7:47 AM CT

Traders apparently believe that Avon Products is looking good.

Our monitoring system detected the purchase of more than 9,000 January 5.50 calls for $0.24 to $0.35 on Friday. Volume surpassed the strike's open interest of 2,791 contracts, showing that this is fresh buying.

Long calls lock in the price where investors can buy stock, allowing them to profit from a rally with limited capital at risk. Their cheap cost can also generate significant leverage on a percentage basis if shares move in the right direction. (See our Education section)

AVP rose 2.8 percent to $5.50 on Friday but is down 10 percent in the last three months. The cosmetics icon announced mixed results on Nov. 3 and is expected to report its next quarterly numbers on Feb. 9.

Overall option volume was 17 times greater than average in the name. Calls outnumbered puts by a bullish 7-to-1 ratio.

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