U.S. Markets closed

Call buyers return to Republic Services

Mike Yamamoto (mike.yamamoto@optionmonster.com)

Republic Services saw upside option activity early last week, and the bulls came back for more on Friday.

More than 2,000 April 30 calls traded in a strong buying pattern in the session, led by a block of 1,207 that went for $2.50, optionMONSTER's Heat Seeker shows. The volume was more than double the strike's open interest of 967 contracts at the beginning of the day, indicating that this is new purchasing.

RSG slipped 0.22 percent to close at $31.82 but is still just off last Monday's intraday high of $32.40, its highest price since May 2011. The waste-disposal company gapped lower after its last quarterly report at the beginning of November, which missed earnings and revenue estimates.

Friday's in-the-money call buying, which locks in the price where traders can buy the stock, is looking for RSG to gain roughly 2 percent or more by mid-April. The options could be sold at a profit earlier if their premiums rise with any rally before then, but the contracts will lose value if the shares don't advance. (See our Education section)

Total option volume in the name was 2,844 contracts on Friday, more than 7 times its daily average of 398 in the last month. Calls outnumbered puts by almost 8 to 1, a reflection of the session's bullish sentiment.

The trading follows heavy buying in the July 35 calls detected by the Heat Seeker last Monday.

More From optionMONSTER