One big investor thinks E*Trade Financial is finally ready to push higher.
optionMONSTER's Heat Seeker tracking system detected the purchase of 10,000 January 2014 10 calls for $2.10 against open interest of just 931 contracts. The trade accounted for almost all the volume in the retail-brokerage stock so far today.
ETFC rose 0.99 to $9.19 in early afternoon trading, and has been attempting to base out since October. It's now pushing against resistance at its 100-day moving average, which could make some chart watchers expect a sharp move if it breaks that level.
It's also refusing to make new lows despite reporting weaker-than-expected earnings and revenue on Jan. 26. But shares are trading for barely half book value, which could draw value investors to the name.
That seems to be the thinking behind today's call buying. The contracts offer 23 months of upside exposure and are a logical way to bet on a long-term rebound in the stock.
Overall option volume in ETFC is more than twice the average amount so far today, with calls outnumbering puts by almost 5 to 1.
Disclosure: E*Trade is a competitor of optionMONSTER's sister company, tradeMONSTER.
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