AOL gapped higher last week, and the bulls are looking for more.
optionMONSTER's Heat Seeker monitoring program detected the
purchase of 10,000 April 36 calls for $2.15 and the sale of 10,000
April 31 puts for $0.35. Volume was more than 40 times open
interest at both strikes.
The position cost $1.80 to open and is similar to owning shares in
the online media site. Interestingly, they
that are much closer to being
in the money
puts they sold
. That increased the cost of the trade and made it more
conservative, suggesting that he or she may think that a pullback
is possible. (See our
They also chose the $31 level to write puts, the top of AOL's price
range before last week's rally. Some chart watchers may consider
that a likely level to expect support if the shares decline. (See
The shares are up 6.35 percent to $35.87 in morning trading. One of
the first major Internet companies in the 1990s, AOL struggled to
stay relevant for years before advertising growth started to drive
results in 2012.
Total option volume in the name is 12 times greater than average so
far today, according to the Heat Seeker.