Call buyers return to W.R. Grace

David Russell (david.russell@optionmonster.com)
August 4, 2014

W.R. Grace has been consolidating for months, but now the bulls are back.

optionMONSTER's Heat Seeker monitoring program detected the purchase of 2,000 January 100 calls for $2.60 on Friday. Volume was 10 times the previous open interest in the strike, which indicates that new money was put to work.

Long calls lock in the price where the chemical stock can be bought, letting investors cheaply position for a rally. The contracts can also generate significant leverage if shares move in the right direction, but they will expire worthless if the stock remains below $100 through early next year. (See our Education section)

GRA rose 1.32 percent to $92.20 on Friday. It more than tripled between late 2011 and last March but has been pulling back since. The most recent quarterly report on July 23 was mixed, with profit beating expectations but revenue lagging.

Total option volume was 5 times greater than average, with calls outnumbering puts by more than 11 to 1.

More From optionMONSTER