Crocs saw last-minute call buying as shares surged late yesterday.
About 7,600 April 15 calls were bought for $0.20 to $0.40 in the final hour of trading yesterday, according to optionMONSTER's Heat Seeker tracking system. This is fresh buying, as open interest in the strike was just 205 contracts before the session began.
These long calls lock in the price where the stock can be purchased no matter how far it might climb, providing potentially significant leverage in a rally. The contracts will track the share price closely because they are in the money but could expire worthless if the stock drops by expiration at the end of next week. (See our Education section)
CROX jumped as those calls were purchased, closing yesterday up 2.03 percent to $15.09. Before the session began, Buckingham initiated coverage of the name with a "buy" rating and a $20 price target.
The footwear maker spiked to $16.88 at the beginning of the year after Blackstone announced that it was taking a $200 million stake in the company. But the stock has been trading sideways since then and fell to the lower end of that range in the last week.
Total option volume in CROX topped 8,800 yesterday, 8 times its daily average for the last month. Only 115 of those contracts were puts, a reflection of the session's bullish sentiment.
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