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Bulls Look for a Jolt From Calpine

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Electricity stock Calpine has been steadily trending higher for more than a year, and the bulls are looking for the energy to continue.

OptionMonster's tracking programs detected the purchase of 7,500 June 18 calls for $1.65. Volume was more than 200 times open interest at the strike.

Owning calls locks in the price investors must pay to buy shares, so they can generate significant leverage if the stock continues to rally. If it drops or stalls, however, they will lose all or most of their value.

Calpine shares rose 2.39 percent to $18.03 yesterday and is up 19 percent so far this year. The stock has been gradually working its way higher since the S&P 500 index bottomed in March 2009 and as natural-gas generation takes market share from coal-fired plants. Earnings and revenue also beat analyst forecasts by a wide margin in the third quarter.

Overall option volume was 14 times greater than average in the session, with calls outnumbering puts by 6 to 1.

—By CNBC Contributor David Russell

Additional News: Calpine Third-Quarter Profit More Than Doubles

Additional Views: Bears Target Penn National Gaming: Russell

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Disclosure

David Russell is a reporter and writer for OptionMonster. Russell has no positions in CPN.

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