Goodyear Tire & Rubber spiked 15 percent last week, and traders are hoping that the momentum will continue for at least another month.
More than 12,600 June 15 calls traded in a heavy buying pattern on Friday, with the largest blocks priced at $0.45 to $0.55. The volume was almost 10 times the strike's open interest of 1,288 contracts before the session began, clearly showing that these are new positions.
GT jumped 6.97 percent on Friday to close the regular session at $14.74 and popped another 1.34 percent after hours. The tire manufacturer opened the week at $12.73, at the intersection of its 50- and 200-day moving averages, before ripping higher with positive numbers from U.S. auto makers and improving conditions in Europe.
Friday's call buyers are betting that GT will gain another 5 percent or more before the contracts expire in five weeks. These options lock in the price where traders can buy the stock no matter how far it might rise, but they could expire worthless if shares remain below the $15 strike price. (See our Education section)
Nearly 28,000 GT options changed hands overall on Friday, about 5 times its daily average for the last month. Calls outnumbered puts by almost 7 to 1, further indication of the session's bullish bias.
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