Is Crown Castle ready to run again?


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Wireless-tower stocks have been coming back to life, and now the bulls are extending an upside bet in Crown Castle International.

optionMONSTER's Heat Seeker monitoring program detected the purchase of 2,500 April 75 calls for $1.67 and the sale of an equal number of March 75 calls for $0.77. Volume was below open interest in the nearer-dated contracts, which indicates that an existing position was closed and rolled forward in time.

Long calls lock in the price where a stock can be purchased, so investors can buy them instead of shares to ride a rally. Given their cheap price and leverage to the underlying equity, traders can often achieve better results by swapping capital from one contract to another as time passes. But if the stock stalls or declines, the calls will lose value and can expire worthless. (See our Education section)

CCI is up 0.21 percent to $75.10 in afternoon trading. The company has benefited from the long-term growth of wireless communications and has mostly reported strong quarterly results.

The stock staged a big rally in 2012 but has been shuffling in a range since early last year. Based on today's unusual activity, someone apparently thinks that it's only a matter of time before the stock goes on another run.

Rival American Tower has also been consolidating, though SBA Communications broke out after aggressive upside trades last month that generated huge profits almost immediately.

Total option volume in CCI is 7 times greater than average so far today, according to the Heat Seeker. Calls outnumber puts by more than 1,000 to 1.

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

Copyright © 2010 OptionMonster® Holdings, Inc. All Rights Reserved.

This article appears in: Investing , Options

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