Traders snap up Triangle calls
Mike Yamamoto | firstname.lastname@example.org
optionMONSTER's Heat Seeker system detected heavy buying in the February 7.50 calls yesterday for $1.10 to $1.31. The volume was well above the strike's previous open interest of 1,160 contracts, clearly indicating that this is new activity.
These long calls lock in the price where traders can buy the stock for the next 4-1/2 weeks no matter how far it might climb. But the contracts, which will track the share price closely because they are in the money, will quickly lose value if the stock doesn't continue moving higher. (See our Education section)
TPLM rose 5.05 percent yesterday to close at $8.73. The oil and natural-gas company gapped down from the $11 level after third-quarter earnings missed estimates in early December, but the stock held support at its 200-day moving average and has been climbing in the last week.
Yesterday's call buying pushed Triangle's total option volume above 5,700 contracts, more than 13 times its daily average for the last month. Overall calls outnumbered puts by nearly 6 to 1.
Disclosure: I own TPLM shares.