Goodyear Tire & Rubber has been a monster, and traders are
upping the ante.
optionMONSTER's Heat Seeker monitoring system detected the purchase
of 7,500 January 23 calls for $1.04 and the sale of 5,000 September
19 calls for $1.78. Volume was below open interest in the
shorter-dated contracts, indicating that an existing long position
was closed and rolled forward in time.
lock in the price where shares can be purchased in the tire
company, letting investors cheaply control upside in the name. They
also have the potential to generate significant leverage if the
stock rallies into early next year. (See
of winning trades for more.)
GT is up 0.65 percent to $20.25 in afternoon trading and has risen
more than 60 percent in the last four months. It's been riding a
wave of bullish sentiment toward the automotive industry and now
stands at its highest levels since the summer of 2008.
Today's trader clearly likes the name because he or she put an
additional $110,000 to work on the long side. Increasing the number
of contracts can boost leverage, but only if GT breaks resistance
and makes a run toward $30. Should it remain at current levels, the
trader will lose existing profits and money spent today.
Total option volume is triple the daily average so far today,
according to the Heat Seeker.
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.