The bulls are looking for more upside in Commercial Metals.
optionMONSTER's Heat Seeker monitoring program detected the
purchase of 5,000 January 15 calls for $0.80 and the sale of an
equal number of January 13 calls for $1.85. Volume was below open
interest in the lower strike, which suggests that an existing
long position was rolled higher.
The move let the investor collect $1.05 of premium while
maintaining exposure to a rally in the steel company, which
corporate raider Carl Icahn offered to acquire for $15 a share in
That news sent CMC 24 percent higher yesterday, and it inched
lower by 0.35 percent to $14.12 in morning trading today.
Investors often roll positions after a trade goes their way
because it lets them take some profits while keeping the right to
benefit from a continued move. (See our
section for more on how options can be used to manage risk.)
Some 11,600 contracts have traded so far today, with calls
outnumbering puts by 24 to 1.