Option Bulls Want to Do Heavy Lifting With Terex
Terex has lit up with upside option activity again this week as the bulls remain highly constructive on the name.
OptionMonster’s tracking systems detected buying in the August 18 calls for $1.80, with more than 2,500 changing hands against open interest of 208 contracts on Tuesday. About 3,100 August 19 calls were also purchased, mostly for $1.30.
Those callslock in the price investors must pay for shares in the company, which produces cranes and heavy trucks. These options can generate significant leverage in the event of a rally, but will lose all or most of their value if the stock doesn’t move higher.
Terex shares rose 8.07 percent to $18.62 on Tuesday. Earnings have beaten estimates for the last three quarters, and the stock doubled in value earlier this year before retreating in April and May.
The next financial-release date hasn’t been announced yet, but last year’s timing suggests that it will occur later this month. Tuesday’s call buyers are apparently looking for the stock to run higher into the news.
Overall option volume was quadruple the daily average, with calls outnumbering putsby more than 4 to 1. Terex also drew bullish activity on June 27.
—By CNBC Contributor David Russell
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David Russell is a reporter and writer for OptionMonster. Russell has no positions in Terex.