Someone apparently thinks that Lear is poised for a breakout.
The maker of automotive seats has gained more than 60 percent since
late July and is now sitting around the same $56 level where it hit
resistance in two years ago. Instead of risking a lot of capital
buying shares after such a move, one investor is using options to
manage the trade.
optionMONSTER's Heat Seeker tracking system detected the purchase
of about 2,000 September 60 calls for $2.80. Open interest stood at
just 6 contracts when the session began, which means that new money
was put to work on the long side.
give the trader the right to buy LEA for $60 in the next six
months, no matter how high shares may go. That will prevent him or
her from missing a rally while dramatically reducing the amount of
capital at risk. (See our
LEA is up 0.14 percent to $55.80 in morning trading. Its advance
has been supported by strong earnings amid a rebound in North
American vehicle demand.
Total option volume in the name is 8 times greater than average so
far today, according to the Heat Seeker. Calls outnumber puts by
more than 500 to 1.
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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