Why calls are surging in Rentech
Chris McKhann | [email protected]
More than 9,400 RNF options have traded so far, compared to a full-session average of just 646 in the last month. Virtually all of the action was in one trade.
A block of 5,384 July 17.50 calls was sold for the bid price of $2.25 against previous open interest of 5,515, according to optionMONSTER systems. At the same time, a block of 4,038 January calls was bought for the ask price of $3.60 with open interest of only 3 contracts at that strike, clearly showing that it is a new position.
This could be a new calendar spread, which would actually be bearish because it is in the money and would take a maximum profit with RNF down at $17.50. But it is more likely a roll, with the trader closing the position in July and rolling the long calls to the January strike. (See our Education section)
RNF is down 3.84 percent to $17.96 after disappointing quarterly results yesterday. The stock traded above $20 last week, and today's losses take it back only to levels of Feb. 26.