OptionsHouse

Options Trading News

August 15, 2013  Thu 5:16 AM CT

ANR: SEE CHART GET CHAIN FIND STRATEGIES
Coal miners have been showing signs of life after getting hammered all year, and bullish traders are now focusing on Alpha Natural Resources.

More than 12,000 September 7 calls traded in a strong buying pattern yesterday as prices doubled from $0.12 to $0.24, according to optionMONSTER's Heat Seeker real-time tracking system. The volume was well above the strike's previous open interest of 8,648 contracts, indicating that new positions were initiated.

These long calls lock in a $7 purchase price for the stock through mid-September no matter how far it might rise, but they will expire worthless if ANR remains below that level. Yesterday's action followed heavy short-term call buying in contracts that expired last Friday, which resulted in many trades that saw exponential gains. (See our Education section)

ANR rose 5.51 percent yesterday to close at $6.13. The stock began the year above $10 but trended steadily lower until finding recent support around $5, and it has risen sharply while breaking above its 50-day average in the last week.

Total option volume in the name yesterday was more than triple its daily average for the last month. Overall calls outnumbered puts by 5 to 1, further reflecting the session's bullish sentiment.

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

Share this article with your friends


OptionsHouse

Premium Services

Upcoming Webinar:

Using Options For Income

http://bit.ly/1nY1OKA

Jon Najarian and Adam Mesh of Options Wealth Machine discuss a detailed strategy utilizing credit spreads to generate income, and how any level of trader can use this simple trading technique.

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 »