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September 20, 2016  Tue 6:45 AM CT

FE: SEE CHART GET CHAIN FIND STRATEGIES

Traders are placing cheap bets on a rebound in FirstEnergy.

optionMONSTER's market scanner shows that 2,200 October 38 calls were purchased for $0.10 yesterday. This represents fresh buying, as volume surpassed the strike's open interest of 1,498 contracts.

Long calls lock in the price where investors can buy stock, allowing them to profit from a rally with limited capital at risk. Their cheap cost can also generate significant leverage on a percentage basis if shares move in the right direction. (See our Education section)

FE rose 2.27 percent to $33.74 yesterday but is down 4 percent in the last three months. The utility company is expected to announce quarterly results after the close on Oct. 27.

Overall option volume was 3 times greater than average in the name yesterday. Calls outnumbered puts by a bullish 28-to-1 ratio.

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