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Option Bulls Pile Into Waste Management

David Russell|Writer, OptionMonster
Thursday, 7 Jun 2012 | 6:25 AM ET
Landfill
D'Arcy Norman
Landfill

Traders have been selling Waste Management, but one man’s trash could be another’s treasure.

OptionMonster’s tracking programs detected a block of more than 21,000 October 34 calls purchased for the $0.80 offer price. The volume of that trade was more than 10 times the previous open interest in the strike, so this is clearly a new position.

Those calls lock in the price investors must pay to buy shares in the garbage-disposal company. They can generate major leverage in the event of a rally and double if the stock climbs just 10 percent in the next four months, but they will expire worthless if it doesn’t move.

Waste Management rose 1.44 percent to $32.30 yesterday. It peaked around $36 in mid-April and is now trying to trying to find support around $32.

Total option volume in Waste Management was 10 times greater than average in the session. Calls outnumbered puts by a bullish 15-to-1 ratio.

Additional News: Waste Management CEO Explains Nat Gas Initiatives

Additional Views: The Big Stink: Is It a Landfill or a Gold Mine?

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David Russell is a reporter and writer for OptionMonster. Russell has no positions in Waste Management,

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