Bullish traders are looking for Praxair to rally by early summer.
More than 3,700 July 135 calls traded in a strong buying pattern for $1.30 to $1.50 yesterday, according to optionMONSTER's Heat Seeker tracking system. The volume was well above the strike's previous open interest of 1,260 contracts, indicating that new positions were initiated.
These long calls lock in the price where the stock can be purchased through mid-July no matter how far it might climb. They could be sold earlier at a profit if premiums rise with a rally before then, but the contracts will expire worthless if shares remain below $135. (See our Education section)
PX rose 1.62 percent yesterday to close at $130.54, right at its 50-day moving average. The specialty-gas producer, which reported mixed quarterly results last week, has been bouncing mostly between $127 and $134 since early February.
Yesterday's total option volume in the name was more than 15 times its daily average for the last month. Overall calls outnumbered puts by about 44 to 1.
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