Call surge powers up NRG Energy

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NRG Energy is starting to claw its way back from a long decline, and one investor is looking for more gains.

NRG optionMONSTER's Heat Seeker tracking system detected the purchase of about 5,300 February 20 calls for $0.80. The buying came around the same time that about 13,000 January 20 calls were sold for $0.32. The January contracts traded against existing open interest, which suggests that a position was rolled from one month to the next.

The strategy will give the investor more time for the New Jersey electricity company to rally. Because they decreased the amount of contracts owned, the trade only cost about $8,000 to implement.

NRG fell 0.3 percent to $20.12 yesterday. The stock is up about 9 percent since mid-December, when it bounced at a 19-month low.

The company's last earnings report on Nov. 4 was worse than expected as higher fuel costs reduced profit. Revenue, however, beat forecasts as demand increased.

The surge of activity in the calls caused total option volume in NRG to spike fivefold from the previous session.

(Chart courtesy of tradeMONSTER)



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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This article appears in: Investing , Options

Referenced Stocks: NRG

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