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July Fireworks Are Expected for Shaw Group

Shaw Group

nuclear power station
Andrew Holt | Digital Vision | Getty Images
nuclear power station

recently got a big contract win, and yesterday buyers lit up the July options.

The July 34 calls saw strong activity, with investors paying $0.69 to $0.75. More than 4,000 of those contracts changed hands against open interest of 100 contracts — not off the charts, but still heavy for a name that usually trades fewer than 1,300 contracts a day.

Shaw Group

Those callslock in the price investors must pay to buy shares, so they can provide a lot of leverage if the construction company rallies into the summer. But if the stock doesn’t move enough, they could expire worthless.

Shaw shares closed at $30.27 yesterday, up 0.97 percent. Last week it received notice from South Carolina Electric & Gasto proceed on its engineering, procurement, and construction contract for two WestinghouseAP1000 nuclear power units and related facilities.

More than 7,500 calls traded in the name yesterday versus just 104 puts, a reflection of the session’s bullish sentiment.

—Najarian has no positions in SHAW.

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Options Trading School:

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Pete Najarianis a professional investor, CNBC contributor, regular co-host of CNBC’s “Fast Money ” and co-founder ofOptionMonster.com .

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SHAW
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