Tech International doesn't usually trade a lot of options, but
yesterday it drew unusually heavy bullish activity.
An investor snapped up a block of 3,000 November 10 calls for $0.35
and $0.40, according to optionMONSTER's Heat Seeker tracking
system. There was no previous open interest in the strike, clearly
indicating that this is a new position. About 300 more contracts
were purchased in subsequent transactions.
Those calls
lock in the purchase price
of shares in the company, whose graphite products are used in an
array of industrial applications. The options can generate some
nice leverage in the event of a rally, allowing the trader to
profit for much less cost than buying the stock directly. But if
GTI doesn't climb, those calls will expire worthless. (See our
Education
section)
GTI fell 0.32 percent to $9.29 yesterday and has been drifting
lower since early 2011, when the stock
double-topped
around $23. It's been attempting to rebound since the summer,
especially after earnings and revenues beat expectations in July.
While the date of the next quarterly report hasn't been announced,
last year's calendar indicates that results will probably be
released in late October. Yesterday's call buyer probably expects
GTI to climb into that news on hopes of another strong report.
GTI trades an average of only 71 total options per session, but
yesterday's activity was 59 times that amount. Calls accounted for
99 percent of the volume.
(A version of this post appeared on
InsideOptions Pro
yesterday.)
