Fortress Investment pulled back yesterday, and the bulls piled in.
OptionMonster's trade scanners detected the purchase of 2,200 September 6 calls for $1.25 to $1.40. The volume exceeded the strike's previous open interest of 1,438 contracts, indicating that new positions were implemented.
The investor now has the right to buy shares in the hedge-fund/private-equity company for $6 through expiration. The cheapness of the calls relative to the stock limits the amount of capital at risk and creates the possibility of significant leverage in the event of a rally. For instance, a 25 percent gain would more than double the value of the options.