OptionsHouse

Options Trading News

May 17, 2013  Fri 12:20 PM CT

TMUS: SEE CHART GET CHAIN FIND STRATEGIES
T-Mobile US has treated the bulls very well, and they keep coming back for more.

optionMONSTER's Heat Seeker monitoring system detected frequent call buying in the wireless company in March and April, when it still was called MetroPCS Communications. It's been rampaging higher since, throwing off profits of several hundred percent again and again.

The name is lighting up our screens today, this time with buyers paying $0.49 and $0.50 for the August 22 calls. An even 2,500 of the contracts were purchased in volume that dwarfed the previous open interest of just 4 contracts.

Once again, investors have locked in a purchase price using long calls. The traders stand to enjoy significant leverage if the stock continues to climb while limiting the amount of money they can lose if it drops. (See our Education section)

TMUS is up 0.36 percent to $19.76 this afternoon and has risen 19 percent so far this year. Its name was changed on May 1 after merging with Deutsche Telekom's T-Mobile business.

Calls outnumber puts by a bullish 6-to-1 ratio so far today, according to the Heat Seeker.
Share this article with your friends


OptionsHouse

Premium Services

Upcoming Webinar:

How to Defend Your Portfolio and Profit in a Market Selloff

http://bit.ly/1OSMWU6

Jon Najarian and Sandy Chaikin of Chaikin Analytics demonstrate how to play defense when the market is selling off. And, how to turn misery into money, whether investing in stocks or trading options.

Education & Strategy

The sweet spot

When using the Stock Replacement Strategy, we must remember that in reality, we are doing a STOCK trade. We are just using options. We are replacing the stock position with an option position (long calls).

View more education articles »