Time Warner bulls bet on more gains
David Russell | email@example.com
optionMONSTER's Heat Seeker tracking program detected the purchase of more than 11,000 April 55 calls against open interest of just 2,309 contracts. Most of the volume priced for $1.04 and $1.05.
These calls lock in the price where investors can buy shares. They'll roughly triple in value in the event that TWX climbs just 8 percent to $58 but will become worthless if it doesn't move. (See our Education section for more on how options can be used to generate leverage.)
TWX is trading at $53.60 this afternoon, up 1.42 percent on the day and 26 percent in the last six months, more than 3 times the performance of the S&P 500 in that period. There have been reports the media company may divest its Time Inc. magazine unit.
Yesterday the Heat Seeker also showed unusual buying in the March 55 calls and the February 55 calls. Those March contracts have almost doubled from $0.30 to $0.55 following today's move.
Total option volume in TWX is already 4 times greater than its full-session average. Calls outnumber puts by more than 6 to 1.