Will Liberty Global rally again?

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Liberty Global has pulled back to long-term support, and buyers are stepping in.


optionMONSTER's Heat Seeker monitoring program detected the purchase of almost 1,700 July 50 calls for $0.20 and $0.25. There was no open interest at the strike before the trade appeared, which indicates that new positions were initiated.

Calls lock in the price where a stock can be purchased, letting investors cheaply position for a rally. They can also generate significant leverage if shares move in the right direction. (See our Education section.)

LBTYA rose 3.25 percent to $41.64 in afternoon trading. The international cable-television stock doubled between the start of 2012 and mid-2013. It pushed to $45 early this year before pulling back to $40. It's now bouncing at that level for a second time as its 200-day moving average catches up with the shares. That could make some investors think long-term momentum remains intact.

Buying those July calls prevents the investor from having to chase the stock if a rally unfolds, while also limiting the amount of capital he or she must risk versus owning the common.

Total option volume was 5 times greater than average in the session, according to Heat Seeker. Calls outnumber puts by more than 200 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.

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



This article appears in: Investing , Options

Referenced Stocks: LBTYA

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