Bulls mining Alpha Natural Resources
Coal miners have been showing signs of life after getting hammered all year, and bullish traders are now focusing on Alpha Natural Resources.
More than 12,000 Sept. 7 calls traded in a strong buying pattern on Wednesday as prices doubled from 12 cents to 24 cents, according to OptionMonster's real-time tracking systems. The volume was well above the strike's previous open interest of 8,648 contracts, indicating that new positions were initiated.
These calls lock in a $7 purchase price for the stock through mid-September no matter how far it might rise, but they will expire worthless if shares remains below that level. Wednesday's action followed heavy short-term call buying in contracts that expired last Friday, which resulted in many trades that saw exponential gains.
ANR rose 5.51 percent Wednesday to close at $6.13. The stock began the year above $10 but trended steadily lower until finding recent support at about $5, and it has risen sharply while breaking above its 50-day average in the last week.
Total option volume in the name Wednesday was more than triple its daily average for the last month. Overall calls outnumbered puts by 5 to 1, further reflecting the session's bullish sentiment.
(Yamamoto has no positions in ANR.)