Options Trading News

February 4, 2014  Tue 9:55 AM CT

Navistar has fallen hard, and some traders apparently believe that it's oversold.

optionMONSTER's Heat Seeker monitoring program detected the purchase of some 2,500 March 33 calls for $1.15 to $1.40. Volume was more than 100 times open interest at the strike, indicating that new money was put to work on the long side.

These long calls lock in the price where a stock can bought, letting investors cheaply position for a rally. The contracts also generate significant leverage if the stock moves higher but will expire worthless if shares remain below $33 through mid-March. (See our Education section)

NAV is up 3.09 percent to $30.40 in morning trading but has lost more than 20 percent of its value in the last two weeks. The truck maker has returned to a level that had been resistance in June 2012 and again last July, which could make some chart watchers expect that it to become support.

Total option volume is almost twice the daily average in NAV so far, with calls outnumbering puts by more than 4 to 1. There was also buying in the March 30 calls yesterday.
Share this article with your friends

Invest Like a Monster - San Antonio: October 9-10


The fastest money in the market
View full report »

Premium Services

Archived Webinar

Education & Strategy

Options Academy: More on the Covered Call Strategy

Last week, we talked about the Covered Call and the misconceptions that surround it. We spoke about how an investor must realize that the Covered Call is actually a premium collection strategy and not so much a directional one. If an investor can grasp this idea, the investor stands to do a heck of a lot better in the strategy than they currently do.

View more education articles »