Market News

October 18, 2016  Tue 7:16 AM CT

At least one trader is looking for gains in Herbalife by early 2018.

optionMONSTER's monitoring system detected the purchase of 4,200 January 2018 85 calls for $3.55 in one print yesterday. This is clearly a new position, as volume was well above the strike's open interest of 1,767 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)

HLF fell 0.62 percent to $61.23 yesterday and is down 5 percent in the last three months. The nutritional-products company is scheduled to report earnings after the close on Nov. 1.

Overall option volume in the name was twice its daily average yesterday.

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