Options Trading News

November 8, 2012  Thu 4:18 AM CT

NII Holdings has been bearish for a long time, but now buyers are betting that it's due for a bounce.

optionMONSTER's Heat Seeker tracking program detected the purchase of about 4,000 January 7 calls for $0.50 and $0.55. Volume was 11 times previous open interest in the strike, indicating that new positions were initiated.

Investors have now locked in a $7 entry price on the company, which provides wireless service in Latin America. The long calls have the potential to generate significant leverage if the stock climbs but will expire worthless if the shares don't move.

NIHD fell 6.65 percent to $6.60 yesterday and has lost more than 70 percent of its value in the last year. Short interest is more than 40 percent of the float, a potential catalyst for buying in the stock.

Total option volume was 15 times greater than average in yesterday's session.

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