IMAX call buyers look for second act
David Russell | [email protected]
optionMONSTER's Heat Seeker monitoring system detected the purchase of some 3,500 August 26 calls for $0.60 on Wednesday. Volume was more than 60 times open interest at the strike, indicating that new money was being put to work.
Long calls lock in the price where shares can be purchased, letting investors cheaply position for a rally. The contracts can also generate significant leverage if the bet is correct. For instance, a 10 percent rally in the stock price would roughly double the value of the contracts. (See our Education section)
IMAX rose 0.32 percent to $24.78 in Wednesday's shortened session. The theater-technology company is now back near the same level where it peaked in October, which could make some chart watchers think that shares are at support. Short interest also represents one-quarter of the float, another potentially bullish catalyst.
Overall option volume in the name was 11 times greater than average, according to the Heat Seeker. Overall calls accounted for more than 70 percent of total activity.