Shares of Entergy have been on a roller-coaster ride for the last three months, but traders are positioning for the next leg to be higher.
About 5,000 August 72.50 calls were purchased yesterday afternoon, led by prints of 1,350 and 1,500 that went for $0.30 and $0.40 respectively, according to optionMONSTER's Heat Seeker tracking system. This is clearly fresh buying, as open interest in the strike was only 280 contracts before the session began.
These long calls , which lock in a $72.50 purchase price for the stock, are looking for ETR to rally by mid-August. If it remains below that level, however, those contracts will be worthless upon expiration three weeks from tomorrow. (See our Education section)
ETR fell 0.47 percent to $70.09 yesterday. The stock shot up after trading below $62 in late March but hit resistance at $72 in early May, and it has been bouncing between that level and $66 ever since.
The regional electricity producer pre-announced earnings on July 17, warning that profits will come in lower than expected when it reports formal second-quarter numbers on Tuesday. But the also reffirmed its outlook for the entire year.
Yesterday's call buying made up almost all the option volume in the name, which was 12 times its daily average for the last month. Only 148 puts traded in the session, a reflection of the bullish sentiment.
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