Calls see Global Eagle taking off
Traders are looking to fly with Global Eagle Entertainment this summer.
About 4,000 July 15 calls were purchased for $0.20 to $0.45 this morning, according to optionMONSTER's Heat Seeker tracking program. This represents fresh buying, as open interest in the strike was only 70 contracts before the session began. About 1,500 August calls were bought as well, also well above open interest.
Long calls lock in the price where investors can buy a stock, which lets them position for a rally with limited capital, and are looking for a rally above $15. That can be safer than purchasing shares directly because only the cost of the options can be lost on a pullback. The calls can be sold anytime before they expire but will lose value if the stock falls. (See our Education section)
ENT is up 5.12 percent to $13.97 today. The airline WiFi provider plunged in early February after announcing plans to sell notes and more stock, and shares have been range-bound mostly between $13 and $14 since.
Total option volume in the name is about 300 times its daily average for the last month. Only 3 puts have changed hands so far, a reflection of the session's bullish sentiment.
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