The bulls are making reservations to spend more time at Starwood
Hotels & Resorts Worldwide.
optionMONSTER's Heat Seeker monitoring system detected the purchase
of 5,500 May 62.50 calls for $2.80 and the sale of an equal number
of February 60 calls for $2. Volume was below open interest in the
60s, indicating that an existing position was rolled from one
contract to the other.
The transaction cost $0.80 and gives the investor an additional
three months while providing s
ignificant leverage potential
. Because the 60s are
in the money
, he or she would have been forced to buy shares at the close today
if the position hadn't been adjusted.
HOT is down 0.76 percent to $61.74 this afternoon but is up
22 percent in the last three months. The hotel operator has refused
to back down from long-term resistance for the last three weeks,
which could be leading some chart watchers to believe that a big
rally is in the works.
Using options keeps costs low for traders, limiting their losses in
case the stock falls. (See our
section for more on how to manage risk.)
Almost 12,000 contracts have traded in the name so far today, which
is quadruple the daily average. Calls outnumber puts by more than
90 to 1.
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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