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Bulls power up with CenterPoint

Mike Yamamoto (mike.yamamoto@optionmonster.com)

Bullish traders piled into CenterPoint at the end of last week, looking for gains ahead of its earnings report later this month.

More than 12,000 March 25 calls were bought on Friday, most of them going for $0.40, according to optionMONSTER's Heat Seeker tracking system. Previous open interest was just 625 contracts, so new money was clearly put to work on the long side.

These long calls lock in the price where a stock can be purchased through mid-March 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 $25. (See our Education section)

CNP fell 0.64 percent to $23.40 on Friday. The stock gapped down on Nov. 26 but drew bullish February call buying the same day as traders looked for a bounce. It continued to fall in subsequent weeks but has been working its way higher since mid-December.

The Houston-based utility is scheduled to announce quarterly results on Feb. 26.

Total option volume in the name was 8 times greater than its daily average in the last month. Overall calls outnumbered puts by more than 90 to 1, a reflection of the session's bullish sentiment.

(A version of this post appeared on InsideOptions Pro on Friday.)


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