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Blackstone Bulls Expecting More

Friday, 12 Jul 2013 | 5:36 AM ET
Stephen A. Schwarzman, Chairman and CEO, The Blackstone Group, USA.
Source: Wikipedia
Stephen A. Schwarzman, Chairman and CEO, The Blackstone Group, USA.

Option activity in Blackstone shows up frequently on our scanners, and the bulls returned to the name yesterday.

Early buyers paid $0.63 for the August 22 calls, according to OptionMonster's tracking programs. They came back repeatedly through the day, driving premiums as high as $0.75. Almost 6,000 contracts traded against previous positioning of just 1,155, clearly indicating new activity.

Calls lock in the price where shares can be purchased in the private-equity firm, letting investors cheaply position for a rally. They can also generate some nice leverage if the stock runs higher.

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Blackstone Group CEO Steve Schwarzman discusses how he is finding improved returns by investing in private equity, real estate, credit, and hedge-fund oriented investments.

Blackstone rose 2.93 percent to $21.79 yesterday, almost $2 below its 52-week high. Yesterday's option paper was also focused on July contracts, so traders are definitely looking for a move before the end of the summer.

Overall calls in the name outnumbered puts by 12,700 to 4,400. Total option volume was almost triple the daily average.

—By CNBC Contributor Pete Najarian

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Disclosures:

Pete Najarian is a professional investor, CNBC contributor, regular co-host of CNBC's "Fast Money" and co-founder of OptionMonster.com. Najarian owns BX calls.

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