Joy Global is up nearly 6 percent today, but that's nothing compared with the profits of some option traders.
Just yesterday, our Heat Seeker monitoring system detected a surge of activity in the short-term weekly options. Investors snapped up the Weekly 65 calls expiring this Friday for $0.44 to $0.75, placing cheap bets on a quick rally.
And that's exactly what they got this morning. JOY was trading higher in the pre-market, opened up 2.6 percent and then proceeded to triple that gain before retreating. Shares of the mining-equipment maker are now up 5.65 percent to $67.13 in afternoon trading.
The Weekly 65 calls, on the other hand, opened at $0.86 and quickly shot up to $3.30--a gain of 400 percent to 500 percent. That's a pretty impressive rise from a single-digit move in the share price.
It's another example of the opportunities afford by weekly options, short-term contracts tailor-made for stocks like JOY. Because these contracts are so cheap, investors can place bullish or bearish bets at a tiny fraction of the share price, which helps manage risk. (See our dedicated weekly option page for more.)
Total option volume in JOY is 10 times greater than average so far today, according to the Heat Seeker.
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