How one investor is playing Hasbro


For the second time this month, a big investor is extending a bullish position in toy maker Hasbro.

On Sept. 10 we cited a spike in volume as about 13,000 October 47.50 calls were sold and rolled to the October 50s. Our Heat Seeker system lit up again yesterday, this time as the October 50s were sold for $0.40 and an equal number of November 50 calls were bought for $0.95.

These long calls lock in the price where shares can be purchased, letting the investor benefit from a rally with much less risk than buying stock directly. The contracts' low cost can also result in significant leverage if HAS moves in the right direction.

The trader collected $1.16 earlier in the earlier roll to the October 50s. This time, the investor paid $0.45 to stay in the trade for another month. (See our Education section for more on how to manage trades more effectively with options.)

HAS fell 0.55 percent to $48.52 yesterday but is up 35 percent in the last year. It's now hovering near its previous all-time high near $50 from late 2010, so the investor is clearly looking for a breakout to new record territory in coming months.

The Heat Seeker also found call buying earlier in the session in the October 52.50s for $0.10 in smaller size. That reflects a similarly bullish expectations.

Total option volume in the name was 14 times greater than average yesterday. Overall calls outnumbered puts by more than 82 to 1.

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