How bulls are playing McGraw Hill


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McGraw Hill Financial has been trending steadily higher, and the bulls are expect more gains in 2014.

optionMONSTER's Heat Seeker program detected the purchase of 6,500 May 77.50 calls, most of which priced for $3.65. There was no previous open interest at the strike before the trade appeared, so new money was being put to work on the long side.

These long calls lock in the price where shares can be bought, allowing investors to position for a rally with limited risk. They now stand to earn potentially huge leverage if the stock continues to make new all-time highs. (See our Education section)

MHFI rose 2.95 percent to $76 Friday, its best closing price ever. The parent of Standard & Poor's has spent the last month breaking above its old peaks from 2007 and bounced at its 50-day moving average last Monday. That could make some chart watchers think that it will continue to advance.

While S&P is known for credit ratings, it also also collects royalties on the countless funds benchmarked to its equity indexes. That means it is can benefit greatly from market rallies.

Total option volume was 43 times greater than average in the session, with calls outnumbering puts by a bullish 49-to-1 ratio.

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

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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This article appears in: Investing , Options

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