Fast money profits in Plug Power

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Plug Power has broken out, and now it's running like a horse.

optionMONSTER's Heat Seeker program detected bullish activity early yesterday as traders paid $0.10 to $0.24 to purchase the Weekly 5.50 calls that expire on Friday. About 14,000 of those contracts had traded by the closing bell, far above the strike's previous open interest of just 2,274 contracts.

Those long calls locked in the price where investors can buy stock in the up-and-coming tech company, whose products are increasingly used in forklifts, refrigeration units, and airport-luggage equipment. They can generate significant leverage from a quick rally, which is exactly what happened yesterday. (See our Education section)

PLUG was up 6 percent when the calls hit but ended the session with a 13 percent gain to $5.69. The price of the short-term calls roughly doubled to as much as $0.40.

The stock rallied more than 1,000 percent between early December and March as investors discovered the fuel-cell group , as shown on our researchLAB market-analysis tool. Shares then pulled back, found support around $4, and have been coming back to life since breaking their 50-day moving average last week.

Overall option volume was 14 times greater than average in the session, with calls accounting for a bullish 83 percent of the total.

(A version of this post appeared on InsideOptions Pro yesterday.)



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: PLUG

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