Options Trading News

May 17, 2013  Fri 4:14 AM CT

The transportation sector has been strong all year, and yesterday traders hit the road with Con-Way.

optionMONSTER's Heat Seeker tracking systems detected the purchase of some 3,400 June 37.50 calls, with most of the large blocks priced for $0.95 to $1.15. This is fresh buying, as open interest in the strike was just 113 contracts before the session began.

These calls lock in the price where shares can be purchased in the Michigan-based trucking company. That produces inexpensive exposure to a continued rally while limiting the amount of capital at risk should they drop. (See our Education section for more on how options can be used to manage positions.)

CNW rose 1.02 percent to $36.62 after being up more than 4 percent at one point in the session. The calls pushed as high as $1.70 during that time, which demonstrates the kind of leverage that can result from even a modest gain.

Con-Way began this month by falling with a weak earnings report but quickly found support at $32 and rebounded.

Total option volume was 100 times greater than average in the name yesterday, with calls accounting for 96 percent of the total.

(A version of this post appeared on InsideOptions Pro yesterday.)
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