Terex attracts strongly bullish strategy
David Russell | email@example.com
optionMONSTER's Heat Seeker tracking system detected the purchase of 4,000 August 21 calls for $0.50. The trade came about two minutes after 2,000 August 20 calls were sold for $0.95, but volume was below open interest in those contracts.
It appears that the trader closed an existing long position in the 20s and rolled it to the higher strike. The unusual thing about the trade is that it doubled the number of contracts owned, resulting in an additional $10,000 of cost on top of the initial outlay.
TEX is up 5.58 percent to $21.02 this afternoon and more than 30 percent in the last two weeks. Most of those gains came after July 25, when strong demand for aerial platforms caused earnings to crush estimates. The maker of equipment such as heavy trucks and cranes has consistently beaten expectations despite macro-economic worries.
Today's trader could have simply exited the original position and taken profits. But the decision to roll it higher and increase the size of the bet reflects a belief that TEX will continue to gush higher through the end of next week.
Overall option volume in the name is almost twice the daily average so far today, with calls outnumbering puts by 8 to 1.