Options Trading News

August 24, 2012  Fri 12:25 PM CT

The bulls are starting to notice Calpine, which generates electricity from natural gas.

optionMONSTER's Heat Seeker monitoring program has detected unusual activity in the name several times this month as investors anticipate upside in the share price. That pattern is continuing today as money flows into the September 19 calls and the October 18 calls. The 19s trade more than 5,500 contracts, most of which priced for $0.15 to $0.25, while 3,600 of the Octobers changed hands, mostly for $0.80. Volume exceeded open interest at both strikes.

Those calls lock in the price traders must pay to buy the stock, so they can generate some nice leverage if CPN moves soon. The contracts will expire worthless if no rally occurs.

CPN fell 0.34 percent to $17.69 in early afternoon trading, and has been making steadily higher lows for the last three years.

Back on Aug. 9, the September 16 calls were purchased for $1.15. Those are now worth $1.75. Yesterday, the October 18s were bought for $0.70 and $0.75.

Overall option volume in the name is more than quadruple average amounts in the name today, with calls outnumbering puts by 60 to 1.
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