Arkansas Best has ripped to all-time highs since lighting up our scanners two weeks ago, and one large trader is looking for even more gains in the trucking company.
optionMONSTER's Heat Seeker system detected the sale of 5,000 November 24 calls for $4 and the purchase of 5,000 November 27 calls for $2.10 yesterday. Volume was below previous open interest in the November 24s but above it in the November 27s, indicating that the trader is rolling a long position higher.
The investor is closing the lower-strike calls and moving the position $3 higher while taking some money off the table in the process. The new long calls , which will track the share price closely because they are still in the money , are looking for the stock to to rally further in the next three weeks but will quickly lose value if it doesn't climb soon. (See our Education section)
On Oct. 10 the Heat Seeker identified bullish call buying in Arkansas Best and two other trucking names, Swift Transportation and Con-Way. At that time ABFS saw November 25 calls bought for $0.85 and $0.95, contracts that are now going for $3.20 to $3.40.
ABFS was down fractionally to close yesterday at $27.21 after hitting a lifetime high of $28.15 earlier in the session. That intraday high was just $0.05 above the trucking company's previous peak of $28.10 reached on Sept. 12, so the stock could encounter some resistance at this level. The company is scheduled to report third-quarter results on Nov. 11 before the market opens.
Total volume in the name topped 10,400 options yesterday, 8.5 times its daily average for the last month. Only 127 of those contracts are puts, a reflection of the session's bullish sentiment.
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