NEW YORK -- Bullish option traders piled into USG at the end of Friday's session, ahead of the company's earnings report later this week. More than 4,200 May 27 calls were purchased for 60 cents to 72 cents less than 45 minutes from the closing bell, according to OptionMonster's Heat Seeker tracking program. This is clearly fresh buying, as open interest in the strike was only 396 contracts before the trading occurred. These long calls lock in the price where the stock can be purchased, gaining with a rally and providing leverage to the underlying shares. But the contracts can quickly lose value if the stock stalls or pulls back and will end up worthless with shares below $27 at expiration in mid-May. USG rose 1% to close at $26.26 on Friday after spiking to session highs along with the last-minute call buying. The building-materials maker, which has been trading in a tight range for the last three weeks, will announce first-quarter results Thursday morning. Friday's total option volume in the name was seven times its daily average for the last month. Overall calls outnumbered puts by more than 5 to 1, reflecting the session's bullish action. -- Written by Mike Yamamoto of OptionMonster Yamamoto has no positions in the stocks mentioned.
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