Gannett is ripping higher, and traders are looking for more upside ahead of the company's earnings report at the end of this week.
OptionMonster's real-time systems detected a surge of call buying in the heavily shorted newspaper company, best known for publishing USA Today. Overall option volume in the name is 9 times greater than average, with calls accounting for a bullish 85 percent of the activity.
The October 13s were the most active strike, changing hands 7,052 times against open interest of 1,588 contracts. Most of the trades went for $0.45, but the price of those calls more than doubled to over $1 by the end of the session.
Gannett's stock closed Friday up 8.02 percent to $13.60. It lost about one-third of its value between late April and late August but has found support around $12 since then. The company has been struggling with a long-term decline in newspaper readership, but more recently has showed signs of recovery as advertising rebounds.
Short interest represented a hefty 14 percent of the float as of mid-September, so forced buying could also propel the shares higher. Friday's call buying may result from new investors looking to get long or from bears hedging their bets against the stock.
The next scheduled event that could serve as a potential catalyst is the release of third-quarter earnings before the market opens on Friday.
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David Russell does not hold significant numbers of shares in the above-mentioned company.
David Russell is a reporter and writer for OptionMonster.