Lamar Advertising is at multiyear highs, and one investor thinks the run will continue.
optionMONSTER's Heat Seeker monitoring system detected the purchase of 4,100 July 48 calls for $3.05. Blocks of 2,050 contracts each were sold in the July 50 calls for $1.90 and the July 55 calls for $0.50. Volume was more than 75 times open interest at all three strikes.
The trade cost $758,500 to open and is highly leveraged to upside in the billboard owner. It will break even if LAMR goes over $49.85 and earn a maximum profit of 143 percent on a move to $55.While unusual on its surface, the strategy essentially consisted of two bullish call spreads , one between the 48 and 50 strikes and the other between 48 and 55. (See our Education Section for more.)
LAMR rose 0.73 percent to $47.99 in late morning trading, and is up 24 percent so far this year. The shares have been rising as an improving economy draws money into media names. It's probably also gotten a boost from CBS's decision to shift its billboards into a real-estate investment trust. Other companies have gained on such moves, which eliminate corporate income tax.
LAMR also peaked around $55 in mid-2007, and today's spread is apparently looking for a move to that level.
Total option volume is 9 times greater than average in the session, according to Heat Seeker. Calls outnumbered puts by a bullish 45-to-1 ratio.
More From optionMONSTER
- Bullish strategy targets Equity Residential
- Still no fear in consumer staples
- Index, ETF option volumes near midday
- Investment & Company Information