Upside position targets MFC Industrial
Mike Yamamoto | firstname.lastname@example.org
optionMONSTER's Heat Seeker system shows that a trader sold 7,760 January 10 calls for $0.10 and bought the same number of July 12.50 calls for $0.35 and $0.30. The volume was below the previous open interest in the January options but above it in the July contracts, indicating that the earlier position was being closed and rolled forward.
The investor is closing the January contracts, which expire at the end of today's session, and opening the July position to get another six months in the trade. He or she is also moving up to a higher strike, as MIL has run sharply higher this month, and the new long calls are looking for the shares to close above $12.50 by expiration in mid-July.
MIL slipped 0.7 percent yesterday to close at $9.92. Shares of the Canadian raw-materials company bounced off their 50-day moving average around $8.30 at the end of December and spiked higher on Jan. 11, one session before the company announced a 9 percent increase in its 2013 dividend to $0.24 per share.
Yesterday's call roll made up almost all the option volume in the name, which reached 15,847 contracts compared with a daily average of just 187 in the last month. No puts traded in the entire session.