OptionsHouse

Options Trading News

July 26, 2013  Fri 5:16 AM CT

NRG: SEE CHART GET CHAIN FIND STRATEGIES
The bulls piled into NRG Energy yesterday, looking for the power producer to test recent multi-year highs.

optionMONSTER's Heat Seeker system detected heavy buying as nearly 18,000 December 29 calls traded yesterday, led by prints of 10,000 and 4,000 that went for $1.30. These are definitely new positions, as open interest in the strike was just 442 contracts before the trades crossed our scanners.

NRG rose 0.36 percent to $27.53 yesterday, ahead of the company's second-quarter results on Aug. 9. The stock has pulled back since peaking at $29.19 on July 19--its highest price since September 2009--but is still up some 20 percent since the start of this year.

Yesterday's long calls, which lock in the price where traders can buy the stock, are looking for NRG to rally back above that $29 level by mid-December. But if it stays below that strike price, the calls could expire worthless. (See our Education section)

Our systems also found upside action in the December 28 and 30 calls yesterday. Total option volume in the name topped 26,500 in the session, nearly 10 times its daily average, with overall calls outnumbering puts by 23 to 1.

Disclosure: I own NRG calls.

(A version of this post appeared on InsideOptions Pro yesterday.)
Share this article with your friends


Related Stories

NRG

NRG Energy attracts last-minute bulls

June 20, 2016

The power company has dropped 16 percent in the last week but saw heavy July call buying at the end of Friday's session.

OptionsHouse

Premium Services

Education & Strategy

The Movement of Delta

In our last column, we spoke about delta. You might remember that we discussed what delta was and what factors affected or changed delta. As you recall, we stated that three factors will have an effect on delta. They were movements of time, volatility, and underlying price. Today, we want to take a further look into the change of delta, this time focusing on change due to the movement in the underlying price. 

View more education articles »