Someone apparently expects a strong earnings report from Paccar later this week.
optionMONSTER's Heat Seeker monitoring program detected the purchase of 5,600 March 60 calls, most of which priced for $0.60 and $0.65. Volume was 145 times previous open interest at the strike, which indicates that new positions were initiated.
These long calls lock in the price where a stock can be purchased, letting investors cheaply position for a rally. The contracts can also generate significant leverage because they cost so little compared with the share price. (See our Education section)
Yesterday's trade also ensures that the investor won't miss a breakout above the $60 level that's held the truck maker in check for the last six months. Quarterly results are scheduled for Friday morning, so that's probably the catalyst the have in mind. The last two reports beat expectations.
PCAR rose 0.55 percent to $56.55 yesterday and is attempting to hold support at its 100-day moving average.
Calls outnumbered puts by a bullish 15-to-1 ratio, according to the Heat Seeker. Total option volume was 7 times greater than average.
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