Calls look for liftoff in Rocket Fuel
Rocket Fuel has lost nearly half its market value this year, but traders are looking for a bounce in the next several weeks.
optionMONSTER's Heat Seeker system detected the purchase of 1,466 June 9 calls for $0.45 yesterday. Open interest in the strike was just 275 contracts before the session began, indicating that new positions were established.
These long calls lock in the price where the stock can be purchased through mid-June no matter how far it might climb. They could be sold earlier at a profit if premiums rise with a rally before then, providing potentially significant leverage, but the contracts will expire worthless if shares remain below $9. (See our Education section)
FUEL rose 2.88 percent to $8.56 yesterday but is still down more than 48 percent since the beginning of the year. The advertising-technology company rose sharply at the end of last week after beating earnings estimates and confirming an unsolicited takeover bid by marketing firm Gravity4.
Yesterday's total option volume in the name was nearly triple its daily average for the last month. Overall calls outpaced calls by more than 2 to 1.
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