Vulcan Materials has pulled back after a strong earnings report, and now the bulls are stepping in.
optionMONSTER's tracking programs detected the purchase of 2,100 May 60 calls yesterday, most of which priced for $2.25 and $2.30. Volume was more than 6 times previous open interest at the strike, indicating that new positions were established.
Calls lock in the price where a stock can be bought, letting investors cheaply bet on a rally. They also can generate significant leverage if the shares move in the right direction and limit capital at risk. (See our Education section.)
VMC rose 0.31 percent to $54.62 yesterday. The sand-and-gravel provider shot up to $60.14 last month after results were announced -- its highest level in more than four years. Shares then retreated to their 50-day moving average before buyers came back.
Total option volume was 7 times greater than average in the name, with calls outnumbering puts by a bullish 15-to-1 ratio.
(A version of this post appeared on InsideOptions Pro yesterday.)
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