Options Trading News

January 8, 2014  Wed 11:13 AM CT

Iron Mountain is trying to work its way higher, and the bulls are sticking with the name.

optionMONSTER's Heat Seeker monitoring program detected the purchase of 7,041 April 27.50 calls for $3.80 and the sale of an equal number of January 27.50 calls for $1.95. Volume was below open interest in the January contracts, which suggests an existing position was closed and rolled forward in time.

Long calls lock in the price where a stock can be purchased, letting investors cheaply control upside in the shares. Adjusting the trade cost $1.85 and extended the bullish bet by an additional three months. (See our Education section)

IRM is down fractionally to $28.70 midday trading, erasing earlier gains. The document-shredding company peaked above $39 last May on hopes that it would convert into a real-estate investment trust, only to gap lower the next month when the transition fell through. Shares consolidated through November and have been grinding higher since.

Total option volume in the name is quadruple the daily average so far today, according to the Heat Seeker. Overall calls outnumber puts by a bullish 10-to-1 ratio.
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The covered call and unhedged risk

I have written a few things on the Covered Call Strategy over the last two weeks. Please understand that those two previous articles plus this one do not constitute a proper, fully in-depth lesson on the Covered Call Strategy like we have in our classes at Option Monster Education. I have picked out a few topics that I believe were worth noting and today I am going to add the final one.

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