Such calls lock in the price investors that must pay to buy shares, so they can deliver huge leverage if the stock moves in the right direction — but they only have until the end of this week to pay off. If the stock doesn’t rally, the contracts will expire worthless.
United Technologies rose 0.57 percent to $83.97 on Friday. After a presentation the day before, Wells Fargo raised its price target to a $93 to $97 range from $80 to $95. The analyst said management is making solid investments in aircraft engines to sustain momentum for its Pratt & Whitney unit.
Activity was pretty busy in the session overall, coming in at almost triple its daily average. More than 15,000 calls traded versus fewer than 2,000 puts .
—Najarian has no positions in UTX.
Additional News: United Technologies Cuts Stock Issue for Goodrich
Additional Views: Hewlett-Packard a Long-Term Play: Najarian
Options Trading School:
Pete Najarian is a professional investor, CNBC contributor, regular co-host of CNBC’s “Fast Money” and co-founder of OptionMonster.com.