OptionsHouse

Options Trading News

October 9, 2013  Wed 4:14 AM CT

FIG: SEE CHART GET CHAIN FIND STRATEGIES
Traders are looking for Fortress Investment Group to rally in the next two months.

More than 4,400 December 7 calls traded for $1.05 in a strong buying pattern yesterday, according to optionMONSTER's Heat Seeker tracking system. The volume was 10 times the strike's previous open interest of 439 contracts, showing that these are new positions.

These long calls, which lock in the price where traders can buy the stock, are betting that FIG will rise above $8.05 before they expire in mid-December. But the contracts, which will track the share price closely because they are in the money, will rapidly lose value if FIG doesn't climb soon. (See our Education section)

FIG fell 1.77 percent yesterday to close at $7.77 after bouncing off its 50-day moving average earlier in the session. The hedge fund and private-equity company spiked to a five-year high of $8.19 on Sept. 19 but has been trapped in a tight range since then.

Total option volume in the name topped 7,700 contracts yesterday, 13 times its daily average for the last month. Overall calls outpaced puts by about 5 to 1, reflecting the session's bullish sentiment.
Share this article with your friends


Invest Like a Monster - San Antonio: October 9-10

Premium Services

Archived Webinar

Education & Strategy

Real vs. Synthetic

We now know that there are two ways of creating a call position, a put position, and a stock position. We can simply use the actual real security or we can recreate it synthetically. We can create these positions in both long and short forms and this ability sets up an interesting scenario--an arbitrage!

View more education articles »