One investor is using the leverage of options to boost a bullish
bet on Republic Services.
optionMONSTER's Heat Seeker monitoring system detected the purchase
of 2,000 July 30 calls in the trash hauler for $3.40 to $3.50.
Volume was more than twice previous open interest at the strike,
indicating that this is fresh buying.
lock in a $30 entry price, about $3 below RSG's current level. That
will provide significant upside leverage if the shares rally,
amplifying even a small move in the stock.
For example, the trader will roughly double his or her money if the
stock climbs just 10 percent to its previous all-time high of
$36.52 from 2008. (See our
section for other bullish strategies.)
RSG is up 1.65 percent to $33.24 in afternoon trading and is up 13
percent so far this year. The stock has been climbing despite a
weak earnings report, with Credit Suisse noting that the company
has the potential to convert itself into a real-estate investment
That would lower its tax bill and follow similar moves by other
companies in recent years--most of which have been cheered by
investors. Republic's next earnings report is scheduled for April
Total option volume is 17 times greater than average so far today,
according to the Heat Seeker. Calls outnumber puts by a bullish
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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