Pinnacle Entertainment has pulled back hard, but at least one
bull is stepping into the name ahead of quarterly results next
optionMONSTER's Heat Seeker monitoring program detected the
purchase of more than 1,300 February 21 calls for $1.10 to $1.34
today. Volume is more than 100 times previous open interest, which
indicates that new positions were initiated.
The investor now has the
right to buy shares
in the casino operator for $21 in the next 2-1/2 weeks no matter
how high it might trade in that time. The contracts provide cheap
upside exposure, limiting the amount of capital at risk if shares
fall. (See our
PNK is up 4.19 percent to $21.65 in afternoon trading but is down
almost 17 percent so far this year. Shares are attempting to hold
support around the same level where they peaked in May and July,
which could make some chart watchers expect a bounce.
Today's trader is probably looking for a rally with earnings coming
out next Wednesday, Feb. 12. The last report missed expectations,
but the stock rallied because management cut costs following the
acquisition of Ameristar.
Total option volume is more than triple the daily average so far in
the session, according to the Heat Seeker. There was also heavy
selling in the March 23 puts for $2, however volume was below open
interest in those.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.
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