Traders sticking with IMAX after gains
David Russell | firstname.lastname@example.org
Our Heat Seeker tracking system detecting buying in the company's June 21 calls for $0.30 just last week. Shares pushed higher and those calls had appreciated to $1.10 by yesterday afternoon. An investor sold 16,926 contracts at that higher price and bought an equal number of June 22 calls for $0.65.
Rolling the position to the higher strike generated a credit of $0.45. That let him or her recover the initial investment and lock in some gains while remaining exposed to further upside if the shares continue to climb through Friday. (See our Education section)
IMAX rose 4.27 percent to $21.74. It rallied more than 1,000 percent between November 2008 and June 2011 as cinemas around the world adopted its film-imaging technology, only to lose more than half its value when the market crashed last summer. Shares have been basing out and pushing higher since then, which could make some traders think that it's ready to rally again.
Overall option volume was 10 times greater than average, with calls outnumbering puts by more than 30 to 1.