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Calls bet NRG will resume power

Mike Yamamoto (mike.yamamoto@optionmonster.com)

NRG Energy has pulled back from six-year highs in the last month, but option traders are looking for the stock to resume its ascent.

More than 16,700 January 35 calls traded yesterday for $2.35 to $2.65, led by a single print of 12,092 that was bought for the ask price of $2.45, according to optionMONSTER's Heat Seeker tracking system. This is clearly new positioning, as the volume was far above the strike's previous open interest of 8,803 contracts.

NRG rose 0.28 percent yesterday to close at $35.55. Shares declined after hitting $38.09 on June 19, its highest price since September 2008, but appear to have found support at their 50-day moving average.

The power and energy company has seen upside option activity several times this year, most recently in a winning January 29/36 call spread cited on our InsideOptions Pro subscription service.

Total option volume in NRG topped 22,000 contracts yesterday, 18 times its daily average for the last month. Overall calls outnumbered puts by 13 to 1, a reflection of the session's bullish sentiment.

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

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