Someone apparently thinks that Ares Commercial Real Estate is
ready to rock.
optionMONSTER's Heat Seeker monitoring system detected the purchase
of more than 4,000 December 15 calls, most of which priced for
$0.15 and $0.20. Volume was more than 70 times open interest at the
strike, indicating that new money was put to work.
lock in the price where the stock can be purchased, letting
investors cheaply position for a rally. The contracts can also
generate significant leverage if the shares keep climbing. (See our
ACRE rose 3.45 percent to $13.50 yesterday after reporting
better-than-expected quarterly profit. "We now have the capability
to be a full spectrum lender of short and long term financing
solutions in the strategically important multi-family market
segment," co-CEO Todd Schuster said in a release. "We have
developed a powerful combination of origination scale and product
depth that positions us well to take advantage of a broader set of
market opportunities going forward."
The stock traded between $16 and $18 for more than a year after its
initial public offering in April 2012, only to crater in June on
news of a big secondary offering. It's been working its way back in
the last two weeks. ACRE also trades for less than book value,
which could make some investors think that it's too cheap.
Total option volume was 157 times greater than average in the name,
with not a single put changing hands all session.
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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