Markets

Calls map upside in C.H. Robinson

The bulls like C.H. Robinson Worldwide ahead of its quarterly report early next month.

optionMONSTER's Heat Seeker monitoring system detected the purchase of about 7,000 August 62.50 calls, most of which priced for $1.20 to $1.40. Volume exceeded the previous open interest of 5,358 contracts, indicating that new money was put to work.

These long calls have locked in $62.50 as an entry price for the logistics company in the next 4-1/2 weeks, offering the potential for significant leverage if it rallies. For instance, a stock move of less than 10 percent to $65 will roughly double the investors' money. In addition, the calls would lose much less money than the stock itself in a major selloff. (See our Education section for more on how options can be used to manage risk.)

CHRW rose 0.48 percent to $60.23 yesterday. It's been bumping up against resistance around $60 since February, when the stock gapped lower on a weak earnings report, and results missed estimates again in May. The next set of quarterly numbers is scheduled Aug. 6 after the close.

Overall option volume in the name was 10 times greater than average in the session, according to the Heat Seeker. Calls accounted for three-quarters of the total.

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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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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