Options Trading News

June 7, 2013  Fri 5:16 AM CT

Private-equity firm KKR has been pulling back, and yesterday the bulls stepped in.

optionMONSTER's Heat Seeker system detected the purchase of some 6,200 January 21 calls, most of which priced for $0.75. The volume was more than 22 times the previous open interest in the strike, indicating that new money was put to work.

These long calls lock in the price where investors can buy shares and can provide significant leverage in a rally. For instance, a 25 percent move in the stock by expiration in mid-January would drive up the calls' premiums by more than 150 percent. (See our Education section)

KKR rose 0.71 percent to $18.43 yesterday. It peaked above $21 in April before falling along with the rest of the market and is now trying to bounce around the same $18 level that presented resistance in February.

Total option volume in the name was 5 times greater than average in the session, with calls outnumbering puts by 15 to 1.

(A version of this post appeared on InsideOptions Pro yesterday.)
Share this article with your friends


Premium Services

Education & Strategy

The art of trading

As I stated in last week's article, a break out or a break down needs to have a couple things happen before it is considered a confirmed break out or break down. The only problem is that in today's market where things move much more quicker than they did just a few years ago, two days could wind up being the majority of the expected movement, if not the whole movement.

View more education articles »