By the time the dust settled, more than 77,000 changed hands against open interest of just 7,027 contracts. There was also buying in the January 7.50 calls for $0.24 to $0.26, but volume was below previous positioning in that strike.
Long calls such as these lock in the entry price that investors must pay to get into a stock. That means their premiums can rise dramatically from a small move in the share price or become worthless if the stock fails to move or experiences a slight decline.
Total option volume in the name was 15 times greater than average yesterday, with calls outnumbering puts by 11 to 1.
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—Russell has no positions in HL.
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David Russell is a reporter and writer for OptionMonster.