Trade sees upside in America Movil

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One big investor thinks America Movil isn't done moving.

optionMONSTER's Heat Seeker tracking system detected the purchase of 1,500 August 25 calls for $1.42. An equal number of August 23 calls were sold at the same time for $2.67, but volume was below open interest.

That suggests the investor previously owned the 23s and rolled their position to the higher strike. He or she collected a credit of $1.25 and remains long the Mexican wireless stock. They probably bought the calls when the shares were lower and are now taking profits. (See our Education section for more on how positions can be adjusted over time to manage risk.)

AMX rose 0.57 percent to $24.83 on Friday and is up 10 percent in the last three months. The company is one of the largest in Mexico, a country that has quietly outperformed the S&P 500 and emerging markets for the last five years.

AMX lagged for most of that time but is now back above its 200-day moving average. That could make some chart watchers think that it's finally regaining momentum. If they're right, owning calls will allow them to leverage the move.

Overall option volume was 5 times greater than average in the session, with calls outnumbering puts by 3 to 1, according to the Heat Seeker.



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.

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


This article appears in: Investing , Options

Referenced Stocks: AMX

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