Traders turned some fast profits in Clorox yesterday.
optionMONSTER's Heat Seeker detected heavy buying in the July 95 calls, with the initial blocks pricing for $0.20. Then everything started moving in a hurry.
CLX was under $90 when the first trades hit, then quickly rallied and ended the session up 3.53 percent to $92.66. But that was nothing compared to the calls , which at one point fetched as much as $1.66--a gain of more than 700 percent in less than an hour.
Long calls lock in the price where investors can buy shares, letting them cheaply position for a rally. The contracts can also generate significant leverage if shares move in the right direction, which is exactly what happened yesterday. (See our Education section)
The bleach maker fell sharply after reporting earnings on May 1 but held support at its 200-day moving average. Clorox's stock was in the headlines last week for different reasons, in relation to 2011 insider-trading allegations .
Overall option volume was fast and furious in the name yesterday, coming in at more than 50 times its daily average for the last month. Calls accounted for a bullish 89 percent of that total.
(A version of this post appeared on InsideOptions Pro yesterday.)
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