Learn the trade here. Make it on tradeMONSTER

Options Trading News

January 22, 2014  Wed 3:16 AM CT

RNF: SEE CHART GET CHAIN FIND STRATEGIES
Rentech Nitrogen Partners has been a roller-coaster ride, but now traders are betting that the next swing will be higher.

optionMONSTER's Heat Seeker monitoring program detected the purchase of more than 3,000 April 20 calls yesterday, most of which priced for $1.90 to $2.10. Volume slightly exceeded the previous open interest, so it appears that new money was put to work.

These long calls lock in the price where shares can be purchased in the fertilizer company. Holders can now cheaply position for gains and stand to enjoy significant leverage in a rally. For instance, a 43 percent move in the stock will drive up the options by 400 percent. (See our Education section)

RNF rose 5.66 percent to $21.10 yesterday. It was spun off from Rentech as a limited partnership in late 2011 for $20, rallied all the way to $49.18 early last year, and bottomed out at $16.90 in December. Yesterday's option activity reflects a belief that shares will continue to rebound.

More than 5,000 contracts traded in the session, compared with 500 on average for the last month. Overall calls outnumbered puts by a bullish 11-to-1 ratio.
Share this article with your friends


TRADING WEEKLY OPTIONS

The fastest money in the market
View full report »

Premium Services

Webinar Playback

eSignal "Back in Black": Multi-Speaker Free Webinar

Education & Strategy

Some things aren't what they seem

As we scan the Heat Seeker, Depth Charge, and other option-tracking systems, we sometimes see heavy activity in calls and...

View more education articles »
optionMONSTER stockMONSTER tradeMONSTER