Jon Najarian’s heat seeker has done it again. It’s identified a stock that’s attracting a lot of interest in the options market.
Najarian says that according to his proprietary software Peabody Energy could be about to move.
“About 5,100 August 23 calls have been purchased for $0.87 to $0.95 against open interest of 1,681 contracts.”
That means institutional investors expect Peabody to trade above $23 by the third week in August.
And after the broadcast Najarian told us even with the stock trading $22 and change it wasn’t too late to ride the wave higher.
“Earnings are scheduled to be released on July 24th and they’re probably betting on upside surprise,” he says.
In other words, even though the options bet is at the $23-strike, the trade could actually be far more bullish -- that earnings will come in stronger than the Street expects and shares will pop on the news.
Posted by CNBC's Lee Brodie
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Trader disclosure: On July 16, 2012, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s "Fast Money" were owned by the "Fast Money" traders; Stephanie Link is long AAPL; Stephanie Link is long JPM; Stephen Weiss is short JCP; Stephen Weiss is long QCOM; Jon Najarian is long AAPL; Jon Najarian is long C; Jon Najarian is long JPM; Jon Najarian is long EAT; Jon Najarian is long INTC; Jon Najarian is long CIGX; Jon Najarian is long CME; Jon Najarian is long CBOE; Jon Najarian is long GLUU
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