Options Trading News

October 12, 2012  Fri 2:45 AM CT

Student lender SLM hit a four-year high yesterday, and traders apparently believe that it isn't done running yet.

optionMONSTER's Heat Seeker tracking system shows that 3,688 October 17 calls traded yesterday in a strong buying pattern for an average price of $0.58. The volume was well above the strike's open interest of 1,899 contracts at the beginning of the day, indicating new activity.

SLM rose 3.9 percent yesterday to close at $17.31 after hitting an intraday high of $17.41. Those are the highest levels since September 2008 for the company, also known as Sallie Mae.

Yesterday's call buyers are looking for SLM to make modest gains by expiration at the end of next week, two sessions after the company's third-quarter earning report on Wednesday. Compass Point initiated coverage of the name yesterday with a "buy" rating. (See our Education section)

Overall option volume in the name was more than 19 times its daily average yesterday. Calls outnumbered puts by nearly 5 to 1, a reflection of the session's bullish sentiment.
Share this article with your friends


Premium Services

Education & Strategy

The art of trading

As I stated in last week's article, a break out or a break down needs to have a couple things happen before it is considered a confirmed break out or break down. The only problem is that in today's market where things move much more quicker than they did just a few years ago, two days could wind up being the majority of the expected movement, if not the whole movement.

View more education articles »