GO
Loading...

Option Bulls Expect More From KKR Financial

Wednesday, 22 Aug 2012 | 6:22 AM ET

KKR Financial Holdings

has been performing well, and yesterday the bulls looked for the strength to continue.

OptionMonster’s tracking programs showed a steady stream of buyers in the January 10 calls, with blocks pricing for $0.15 and $0.25. Volumes weren’t off the charts, but it definitely stood out with more than 5,700 trading against previous positioning of just 638 contracts.

KKR Financial Holdings » Read More

Those calls (explain this) lock in the price investors must pay to buy shares on the specialty finance company. They can generate some nice leverage in the event of a rally, but will also expire worthless if the stock doesn’t move.

KKR Financial shares ended yesterday higher by 0.22 percent at $9.17. The company has an expertise in a range of asset classes, primarily investing in financial assets, and remains below under book value. That may be why we’ve recently seen inside buying in the shares.

Calls outnumbered puts (explain this) by 6,200 to about 30, so it was definitely a bullish session! An even 6,300 contracts traded versus average volume of just 350.

—By CNBC Contributor Pete Najarian

Additional News: KKR Buys Into Novo, Bets on China Youth Apparel Market

Additional Views: Traders Look for a Quick Move in Silver ETF: Najarian

___________________________

___________________________
Options Trading School:

___________________________

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

___________________________

Disclaimer

Featured