MetroPCS Communications gapped higher last week, and now the bulls are buying the pullback.
OptionMonster’s real-time systems detected the purchase of some 4,300 April 10 calls for $1.10 and $1.15 yesterday, versus previous open interest of just 103 contracts. Most of the activity occurred in the final hour of trading, when big institutional investors often go to work.
These calls lock in the entry price investors must pay to buy shares. That gives them the potential to create major leverage if the stock rallies, but they can also lose all their value if it moves in the wrong direction.