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Option Bulls Hope Titan Lives Up to Its Name

David Russell|Writer, OptionMonster
Thursday, 8 Dec 2011 | 6:29 AM ET

The bulls are betting that Titan International is ready to run.

OptionMonster's real-time systems detected the purchase of about 4,500 December 22.50 calls yesterday, most of which priced for $0.70. Volume was more than twice open interest in the strike.

These long calls lock in an entry price on the stock, which gives them the ability to move considerably more than the share price if Titan rallies. If it fails to move in the next seven sessions, however, the calls will expire worthless.

Titan climbed after the options were bought yesterday and closed at $22.09, up 3.76 percent on the session. The company, which makes tires for tractors and mining equipment, has beaten estimates for at least three straight quarters and announced price increases in July.

Short interest stood at 29 percent of the float in mid-November, which could potentially squeeze the shares higher. The stock tripled from August 2010 to April of this year and has been consolidating since then.

Overall option volume was 22 times greater than average yesterday. Calls accounted for 95 percent of the activity, a reflection of the bullish sentiment.

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—Russell has no positions in TWI.

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David Russell is a reporter and writer for OptionMonster.

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