Airplane and helicopter maker Textron popped yesterday, and option traders are betting that it will keep gaining altitude.
OptionMonster's tracking programs detected the purchase of about 5,800 January 26 calls in volume that was far above the previous open interest of 663 contracts, indicating that this is fresh buying. Premiums started at $0.24 and rose along with the stock price, fetching $0.28 near the close of the session.
Calls lock in the price where investors can buy shares and can generate significant leverage relative to the underlying equity. But if the stock doesn't move by expiration in about two weeks those contracts will lose all their value.