Barbarians have been at the gates of CommonWealth REIT, and yesterday the options traders jumped in.
OptionMonster's tracking systems detected the purchase of about 2,000 October 25 calls for $1.30. Seconds later, a similar number of October 30 calls were bought for $0.35. Volume was more than triple the previous open interest at each strike, indicating that new money was put to work on the long side.
These options lock in prices where investor can buy the stock no matter how high it may rise, which gives them potentially huge leverage if it continues to advance.