The bulls want to give Nu Skin Enterprises a facelift.
optionMONSTER's Heat Seeker monitoring program detected a surge of
call volume in the maker of anti-aging creams, which has lost
almost half its value since the spring on worries about its
business model.
Activity focused on the October 40 calls, which were bought for
$1.57, and the October 45 calls, sold for $0.27. Roughly 2,000
contracts traded in each.
Known as a
bullish call spread
, the trade cost $1.30 to open and will generate a maximum profit
of 285 percent if the stock closes at or above $45 on expiration.
There was also subsequent
buying
of about 1,000 October 40 calls later in the session as another
investor also positioned for a rally. (See our
Education
section)
NUS rose 2.27 percent to $37.85 yesterday, one session after
hitting a 13-month low of $36.20. Shares peaked above $60 earlier
in the year but plunged over the summer after professional
short-sellers at Citron Research accused the company of running an
illegal marketing scheme in China.
Management rejected the accusation and recently said will continue
to expand its business on the mainland. Short interest also
accounted for roughly 18 percent of the float as of Sept. 14, which
could potentially draw buyers to the name.
Overall option volume was 6 times greater than average in the
session, with calls accounting for four-fifths of the total.
