Frontline has been falling for the last three years, but the
bulls took the helm on Friday.
optionMONSTER's Heat Seeker monitoring system detected heavy call
volume in the oil-tanker company, with some 2,700 of the June 2
contracts purchased against previous open interest of just 205.
Premiums started at $0.15 and then doubled to $0.30 as the shares
lock in the price where investors can buy stock, and they can
deliver significant leverage because they're so cheap to buy.
Traders often uses them to keep a trade from running away from them
while reducing the amount of capital at risk. (See our
section for more on why more investors are using options in their
FRO surged 12 percent to $1.97 on Friday. It fetched more than $35
in April 2010 before a slowing global economy took the wind of out
its sails. In recent weeks, however, numbers from China and Europe
have surprised to the upside, and sentiment has warmed toward
emerging-market stocks. That could be bullish for a transport such
Short interest also stood north of 20 percent in mid-April, which
could also squeeze the shares higher.
Total option volume was 16 times greater than average in Friday's
session, with calls outnumbering puts by a similar proportion.
(A version of this post appeared on
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