Credit: Shutterstock photoTraders are looking for another strong quarter from Thor Industries as motor-home companies blast to new highs.
OptionMonster's tracking programs showed that 2,000 December 95 calls were bought for $2 on Friday, while 1,000 December 90 calls were sold for $3.60. Volume was below open interest at the higher strike, so an existing position was likely rolled to the higher strike.
Long calls lock in the price where investors can purchase shares, allowing them to profit from a rally with limited capital at risk. (See our Education section.) Doubling the size of the position shortly before tonight's earnings report creates the potential for huge profits if the maker of brands like Airstream and Redwood RV explodes higher. Overall option volume was 6 times greater than average in the session.
THO rose 1.22 percent to an all-time closing high of $90.67, and is up 61 percent this year. Top competitor Winnebago Industries (WGO) has fared even better, with a 71 percent gain since January.
Both companies have beaten expectations thanks to strong demand and margin-boosting cost controls. They've also gobbled up smaller competitors to consolidate a once-fragmented market for campers and trailers.
Perhaps even more importantly, investors are piling into stocks that benefit from a stronger economy. OptionMonster's proprietary ResearchLab market scanner has shown broad strength in retailers, industrials, and transportation-related names. The trend has accelerated since the Nov. 8 election of Donald Trump on a platform of infrastructure spending, tax cuts, and deregulation.
.png)
Other small groups with big gains recently include office furniture, steel makers, ethanol producers and truckers. Readers can follow the moves every day on ResearchLab's groups page , which provides quick access to key news, options activity and upcoming events.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
Copyright © 2010 OptionMonster® Holdings, Inc. All Rights Reserved.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
