IMAX has been ripping higher, and one investor is positioning for the show to continue.
optionMONSTER's Heat Seeker monitoring system detected the purchase of 16,935 August 28 calls for $0.55 against open interest of just 413 contracts. A matching number of July 25 calls traded at the same time for $0.55, but volume was below previous positioning.
This suggests that an existing trade was closed in the July contracts, which expire at the end of this week, and was rolled forward in time. The move gives the investor an additional month of upside exposure at no incremental cost, aside from commissions. (See our Education section)
IMAX is down 1.44 percent to $24.98 today but is up more than 20 percent since early June. The stock was the target of repeated call buying last month, and some traders more than doubled their money as the shares pushed higher.
Today's option trade occurred shortly before second-quarter results are released on July 26. The digital imaging company has enjoyed strong earnings growth since about 2009 as cinemas around the world increasingly adopt its movie technology.
Overall option volume is 17 times greater than average in the name so far today, with calls outnumbering puts by 90 to 1.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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