Calls bet NRG Energy will light up
Traders are looking for a pop in shares of NRG Energy by the end of next week.
About 4,000 June 24 calls were purchased for $0.60 to $0.70, according to optionMONSTER's Heat Seeker tracking program. This represents fresh buying, volume was well above the strike's previous open interest of 1,385 contracts.
Long calls lock in the price where investors can buy a stock, letting them position for a rally at limited cost. They carry less risk than owning shares because the most that can be lost is the price of the options no matter how far the stock might fall. (See our Education section)
NRG fell 1.44 percent to $24.03 yesterday. The power company gapped up with quarterly results on May 8 but has been declining steadily for the last two weeks.
Overall option volume in NRG surpassed 9,900 yesterday, more than 6 times its daily average for the last month. Calls made up a bullish 98 percent of the total.
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