Bulls sticking with United Rentals

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The bulls are sticking with United Rentals, which has been going straight up for months.

optionMONSTER's Heat Seeker monitoring program detected the purchase of 3,000 June 97.50 calls for $5.45 and the sale of an equal number of June 92.50 calls for $8.19. Volume was below open interest at the lower strike, which indicates that an existing position was closed and rolled forward.

Making the adjustment let the investor collect $2.74 while staying positioned for further potential gains through the new long calls. It also provides protection from a near-term pullback because the 97.50s have a lower delta . (See our Education section for more on managing risk more effectively with options.)

URI rose 0.16 percent to $94.91 on Friday after hitting a new all-time high of $96.51 in midday trading. The stock is up 68 percent since the start of last autumn as an improving economy boosts demand for its products.

Total option volume was quadruple the daily average, with calls outnumbering puts by a bullish 9-to-1 ratio.



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.

Copyright © 2010 OptionMonster® Holdings, Inc. All Rights Reserved.


This article appears in: Investing , Options

Referenced Stocks: URI

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