R.R. Donnelley is up about 40 percent this year, and some traders are looking for even more gains.
More than 1,700 June 13 calls traded in a strong buying pattern yesterday for $0.30 to $0.43, optionMONSTER's Heat Seeker system shows. Volume was well above the strike's open interest of 1,134 contracts before the session began, indicating new activity.
RRD rose 1.28 percent yesterday to close at $12.70. The stock dropped to single digits late last year after Google blamed the commercial-printing company for a premature release of earnings numbers that sent the search giant's shares plunging in October. But Donnelley found support just below the $9 level in early January and has been trending higher since then, spiking with strong first-quarter results on April 25.
Yesterday's call buyers are betting that the RRD will be well above $13 before the June contracts expire five weeks from today. These options lock in the price where traders can buy the stock no matter how far it might rise, but they can expire worthless if it remains below that strike price. (See our Education section)
Total volume in the name was 2.5 times higher than its daily average for the last month.
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