OptionsHouse

Options Trading News

October 24, 2013  Thu 12:08 PM CT

CX: SEE CHART GET CHAIN FIND STRATEGIES
Construction is getting back in gear, and traders are playing the trend with cement giant Cemex.

optionMONSTER's Heat Seeker system shows that volume picked up early in the December 10 calls. The large initial blocks priced for $1, followed by prints for $1.30 later in the morning. Almost 4,600 contracts traded, compared with previous open interest of just 309 contracts.

These long calls lock in the price where shares can be purchased, letting investors cheaply position for a rally. Today's trade is especially noteworthy because they used in-the-money contracts that will closely track movement in the underlying stock price. (See our Education section)

CX stood at $10.55 when the calls hit, but then it started moving and is now up 3.02 percent to $10.90 in afternoon trading. It spent most of the month consolidating around the same $10.50 level that was resistance in February, which could make some chart watchers think that it's ready to start rallying again.

The stock appreciated almost 500 percent between late 2011 and May 2013 as homebuilders rose. The entire group has been consolidating for months, and traders are looking for a continuation of that earlier move. (See our researchLAB service to analyze the performance of more than 100 industry groups over different time frames.)

Interest rates have been falling in the last month, promising to increase home affordability. PulteGroup, the largest builder by revenue, also reported strong results today and expressed confidence demand will improve.

Total option volume in CX is triple the daily average so far today, according to the Heat Seeker. Calls outnumber puts by a highly bullish 7-to-1 ratio.
Share this article with your friends


Related Stories

CX

Bullish traders build positions in Cemex

July 25, 2016

The Mexico-based cement manufacturer has rallied 6 percent in the last month, ahead of quarterly results before the market opens on Wednesday.

CX

Traders bet on concrete gains in Cemex

July 18, 2016

The Mexico-based cement maker has rallied 15 percent in the last month, and traders are looking for the uptrend to continue.

OptionsHouse

TRADING WEEKLY OPTIONS

The fastest money in the market
View full report »

Premium Services

Education & Strategy

Keep it simple

One of the appealing features about options trading is that different options can be combined to create a large variety of risk vs. reward profiles.

View more education articles »