Herbalife has been working its way higher, and the bulls think
the party's just getting started.
optionMONSTER's Heat Seeker monitoring program detected the
purchase of 7,000 November 50 calls for $5.45 and the sale of a
matching number of November 45 calls for $7.75. Volume was below
open interest in the 45s, which indicates than an existing position
was closed and rolled to the higher strike.
lock in the price
where shares can be purchased, letting investors cheaply track
upside in the stock price. That limits risk and offers the
opportunity for significant leverage if they anticipate the
In the case of today's trade, the investor probably bought the
November 45 calls at an earlier date and is adjusting the position
now that the stock has climbed. He or she collected a credit of
$2.30 in the process and is positioned for more potential gains
through the new November 50 calls. (See our
HLF is down 0.77 percent to $48.01 this afternoon but is up 26
percent in the last three months. The weight-loss company was the
subject of a major dispute between Wall Street heavyweights Bill
Ackman and Carl Icahn earlier this year as Ackman questioned its
accounting while Icahn got long. (See
The company's last two earnings reports have beaten expectations,
and the stock has been finding support at its 200-day moving
average in recent months, which could make some chart watchers
think that it's due for further gains. Short interest remains
elevated, standing at 44 percent of the float in mid-June.
Total option volume is nearly triple its daily average so far
today, according to the Heat Seeker. Calls outnumber puts by 7 to
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