Options Trading News

November 28, 2012  Wed 3:47 AM CT

International Paper is rebounding after a pullback, and the bulls are looking for the gains to continue.

optionMONSTER's Heat Seeker monitoring program detected the purchase of about 20,000 April 39 calls for $1.45. An equal number of January 39 calls were sold around the same time for $0.48, but volume was below open interest in those.

This indicates that an existing long position in the January contracts was closed and rolled to the Aprils. The investor paid $0.97 for that additional three months of upside exposure to the paper and packaging stock. (See our Education section)

IP rose 0.42 percent to $36.25 yesterday. The company, once a member of the Dow Jones Industrial Average, has spent years adjusting to less demand for paper. It's been rallying more recently and is up 42 percent in the last year as higher prices boost profitability. Third-quarter results in October missed estimates, but management was optimistic that performance will improve in 2013.

Total option volume in the stock was 11 times greater than average in the session, with calls outnumbering puts by 17 to 1.
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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.

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