Cosmetics and fragrance company Coty attracted bullish option trades that accelerated in large volume late Friday, ahead of its presentation at an industry conference tomorrow.
More than 11,000 March 15 calls traded in a strong buying pattern throughout the session, going for $0.50 right after the open and doubling by the end of the day to $1, according to optionMONSTER's Heat Seeker tracking system. These are clearly new positions, as previous open interest in the strike was a mere 51 contracts.
These long calls lock in the price where traders can buy the stock through the end of next week no matter how far it might climb. But the contracts, which will track the share price closely because they are in the money , will quickly lose value if the stock stalls or pulls back in coming days. (See our Education section)
COTY rose 3.58 percent to $15.62 on Friday after spiking to a session high of $15.80 as the call buying surged in the last half-hour. The stock gapped up from below $14 on strong quarterly revenues reported on Feb. 14 and has drifted higher since.
The company is scheduled to present tomorrow morning at the Bank of America Merrill Lynch 2014 Consumer & Retail Conference in New York.
Overall option volume in Coty topped 17,200, compared to a daily average of just 253 in the last month. Of Friday's total contracts, only 376 were puts.
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