Western Union draws call buyers
Traders are apparently looking for good numbers when Western Union reports earnings tomorrow.
More than 6,000 March 20 calls were bought for $0.12 to $0.15 this morning, optionMONSTER's Heater Seeker system shows. These are clearly new positions, as open interest in the strike was a single contract before the trades occurred.
These long calls lock in the price where investors can buy a stock, which lets them position for a rally with limited capital. That can be safer than purchasing shares directly because only the cost of the options can be lost on a pullback. The calls can be sold anytime before they expire in mid-March but will quickly lose value if the stock falls. (See our Education section)
WU is down 0.17 percent to $17.70 in midday trading. Shares have been bouncing in a range so far this year, mostly between $17 and $18 with 200- and 50-day moving averages as support and resistance.
The payment-services company is scheduled to release quarterly results after the market closes tomorrow.
Total option volume in the name is just shy of 8,000 so far today, already triple its full-session average for the last month. Only 981 of those contracts are puts, reflecting the bullish sentiment.
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