Bullish calls wired to Western Union
A trader is betting on a big rally in Western Union by early next year.
optionMONSTER's Heat Seeker system detected the purchase of 2,500 January 20 calls in a single print for $0.30. This is clearly a new position, as the volume was well above the strike's open interest of 1,622 before the trade appeared.
This bullish call buying , which locks in the purchase price of the stock, is looking for WU to rise above $20.30 by mid-January. The options could be sold earlier at a profit if their premiums rise with a rally before then, but they will expire worthless if the shares remain below the $20 strike price. (See our Education section)
WU rose 0.84 percent yesterday to close at $16.79. The money-transfer company spiked higher on May 1 after quarterly earnings beat estimates but has been range-bound for the last month.
Raymond James upgraded the name to "outperform" with a $19 target price yesterday, while Macquarie gave it a "neutral" rating with a $17 target accompanied by bullish commentary. Western Union is scheduled to present at the William Blair & Company's Growth Stock Conference on Thursday.
Total option volume in WU was 4,380 contracts yesterday, double its daily average for the last month. Calls outnumbered puts by a bullish 13-to-1 ratio.
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