Options Trading News

November 6, 2012  Tue 2:45 AM CT

Manitowoc fell after reporting quarterly results yesterday morning, but one trader is betting that the stock will bounce higher by Christmas.

More than 2,500 December 17 calls were bought in less than 10 minutes yesterday, most of them going for $0.30, according to optionMONSTER's Heat Seeker tracking system. The volume was 5 times the strike's open interest of 509 contracts at the start of the session, so it was fresh buying.

The long calls are looking for MTW to gain roughly 21 percent by expiration on Dec. 21. These options can be sold earlier if their premiums rise with a rally in the stock, but they will expire worthless if the shares don't move.

MTW fell 2.52 percent yesterday to close at $14.32. The crane manufacturer reported third-quarter earnings of $0.17 per share in the pre-market, well below the consensus estimate of $0.29 EPS. Revenues came in at $955.7 million, short of the $1.05 billion that analysts had been looking for.

Shares dropped sharply in late September in sympathy after construction-equipment giant Caterpillar issued a sobering outlook on the global economy, but the stock has trending higher since then with its 50-day moving average as support. The company is scheduled to present at the Robert W. Baird Industrial Conference today at 5:05 p.m. ET.

Overall option volume in the name was 2.5 times higher than its daily average. Calls outnumbered puts by about 6 to 1.
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