ITT Educational Services has been parked at long-term lows, but
now the bears are getting nervous.
optionMONSTER's monitoring programs detected the purchase of about
2,500 May 15 calls for $0.45 and $0.50 yesterday morning. The
volume was well above the strike's open interest of just 343
contracts before the session began, definitely showing that new
money was being put to work.
lock in the price where investors can buy shares in the massively
shorted for-profit education stock, which can provide some nice
leverage in the event of a rally. And that's what happened almost
ESI started working its way higher soon after the trades hit,
erasing an early loss and closing higher by 6.11 percent at $13.71.
But that gain was nothing compared with the move in the May 15
calls, which roughly doubled to $0.90 shortly before the close as
another 2,600 contracts changed hands throughout the session. (See
The company reports earnings before the bell two weeks from now on
April 25. That means there is plenty of time for a potential short
squeeze in the stock, which is back to levels last seen in early
Total option volume in the name was 28 times greater than average
in the session, with calls outnumbering puts by 19 to 1.
(A version of this post appeared on
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