Bulls want to clean up with Clorox
(The following is an example of notable trading cited on optionMONSTER's InsideOptions Pro service yesterday.)
Clorox has pulled back after a strong quarterly report, and now the bulls are stepping in.
optionMONSTER's Heat Seeker program detected the purchase of about 6,300 April 115 calls yesterday, most of which priced for $0.30. Volume was more than 5 times the strike's previous open interest, an indication that new money was at work.
Long calls lock in the price where investors can buy a stock, which lets them position for a rally with limited risk. The relatively low cost of these options can also produce significant leverage if shares move higher, but the contracts can quickly lose value on a pullback. (See our Education section)
CLX fell 0.37 percent to $107.43 yesterday. The cleaning-products company reported better-than-expected earnings and revenue on Feb. 4, and management raised its outlook for the top and bottom lines.
That news initially sent shares above $112, but sellers stepped in over the following month. Yesterday was the first session since September that the stock closed under its 50-day moving average.
Yesterday's overall option volume in the name was 27 times its daily average for the last month. Total calls accounted for a bullish 96 percent of the total.
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