Calls pile up in Genworth at highs
Mike Yamamoto | firstname.lastname@example.org
More than 7,000 April 19 calls were purchased for $0.07 to $0.24 yesterday, according to optionMONSTER's Heat Seeker tracking system. Previous open interest in the strike was just 383 contracts, indicating that new positions were established.
Our scanners also detected heavy buying in the Weekly 18 calls that expire at the end of today's session, as some 6,000 contracts traded for $0.02 to $0.50. Traders also purchased the Weekly 18.50 contracts that expire at the end of next week. Volume was far above the open interest in both of those strikes.
These long calls lock in the price where the stock can be purchased no matter how far it might climb. They could be sold earlier at a profit if premiums rise with a rally before their respective expiration dates, but the contracts could end up worthless if shares drop. (See our Education section)
GNW closed yesterday unchanged at $18.23, in the middle of its session range. The company, which offers insurance and investment services, hit $18.58 earlier in the day--its highest price since April 2010.
Total option volume in the name topped 34,000 contracts, 5 times its daily average for the last month. Overall calls outnumbered puts by more than 4 to 1.