OptionsHouse

Options Trading News

September 3, 2013  Tue 4:06 AM CT

OLN: SEE CHART GET CHAIN FIND STRATEGIES

Traders want to get a bang from gunpowder stock Olin.

optionMONSTER's tracking programs detected unusual activity in the maker of Winchester ammunition. The first big blocks hit in the October 25 calls, with investors paying $0.20. More than 1,400 would trade against previous open interest of just 10 contracts.

Calls lock in the price where shares can be purchased, giving them potentially significant leverage to a rally. And that's exactly what happened, because OLN inched higher and those contracts almost doubled to $0.40. (See our Education Section.)

Later in the session, buyers snapped up more than 2,000 November 25 calls, this time pushing premiums from $0.40 to $0.55. Volume also surpassed previous open interest of 1,468 contracts, indicating that new money was put to work on the long side.

OLN rose 0.13 percent to $23.10, and is trying to work its way higher from the bottom of its recent trading range. Total option volume was almost 10 times greater than average in the session, with calls outnumbering puts by a bullish 31-to-1 ratio.

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

Share this article with your friends


Related Stories

OLN

Why the bulls got a bang from Olin

March 5, 2015

Call buyers have profited as the ammunition maker climbed to its best levels since 2008, and traders are looking for even more gains.

Invest Like a Monster - San Diego: June 26-27

Premium Services

Archived Webinar

Education & Strategy

Short Gamma

Last week, we talked about long Gamma. We said that long gamma is acquired by purchasing options and when you...

View more education articles »