OptionsHouse

Options Trading News

July 18, 2014  Fri 12:21 PM CT

JOY: SEE CHART GET CHAIN FIND STRATEGIES
Traders are betting that Joy Global will keep rising in coming weeks.

More than 6,300 August 70 calls traded today for $0.41 to $0.71 today, according to optionMONSTER's Heat Seeker tracking system. The volume was well above the strike's previous open interest of 1,471 contracts, indicating that this is fresh buying.

These long calls lock in the price where the stock can be purchased in the next month no matter how far it might climb. They could be sold earlier at a profit if premiums rise with a rally before then, providing potentially significant leverage, but the contracts will expire worthless if shares remain below $70 through mid-August. (See our Education section)

JOY is up 0.19 percent to $63.92 in afternoon trading. The mining-equipment manufacturer spiked higher on Wednesday on takeover speculation but pulled back with the rest of the market in yesterday's selloff. Even before that move, the stock had risen more than 25 percent along with other industrial names as U.S. and China reported improving economic data.

Total option volume in the name is more than double its full-session average. Overall calls are outpacing puts by 6 to 1, a reflection of the day's bullish sentiment.
Share this article with your friends


OptionsHouse

TRADING WEEKLY OPTIONS

The fastest money in the market
View full report »

Premium Services

Education & Strategy

Using spreads to minimize risk

Last week we discussed the risk vs reward profile of a debit call spread in Wells Fargo (WFC). This week we will run thru the risk vs reward of selling a credit put spread to achieve the same exposure of that debit call spread.

View more education articles »