Green Plains calls bet on rebound
Traders are looking for Green Plains to make a comeback by early next year.
optionMONSTER's Heat Seeker system shows that 6,000 January 30 calls were purchased for $0.90 to $1 yesterday. This is fresh buying, as volume well exceeded the strike's open interest of 1,873 contracts at the beginning of the session.
These long calls lock in the price where the stock can be purchased through mid-January 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 $30. (See our Education section)
GPRE fell 3.88 percent to $21.58 yesterday and has lost a third of its market value since breaking below its recent range in late June. The ethanol producer reported mixed second-quarter a results a week ago, missing earnings expectations but beating revenue estimates.
Overall option volume in the name yesterday was more than 6 times its daily average for the last month. Total calls outnumbered puts by more than 100 to 1.
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