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.