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Calls pop in Coca-Cola Enterprises

David Russell (david.russell@optionmonster.com)

The bulls are taking another shot at Coca-Cola Enterprises as the soft-drink bottler rebounds from a late-June selloff.

optionMONSTER's Heat Seeker monitoring system detected the purchase of 7,500 November 35 calls for $2.75. Volume was almost triple the previous open interest at the strike, indicating that new positions were initiated.

Long calls lock in the price where shares can be bought, giving investors a way to track gains in the stock less expensively than buying shares outright, providing the potential for significant leverage. For instance, a move of less than 10 percent in the stock price will translate into profit of more than 80 percent in the calls. (See our Education section for more on using options for leverage.)

CCE rose 0.46 percent to $36.89 in the session. It touched an all-time high of $39.40 in mid-May, only to lower its guidance the next month because of weakness in Europe. The stock then headed lower before bouncing at its 200-day moving average three weeks ago.

Our systems identified July 38 call buying back on May 30, but those contracts have now lost almost all of their value because of the stock's earlier decline.

Total option volume was 10 times greater than average in the session, according to Heat Seeker. Calls outnumbered puts by a bullish 23-to-1 ratio.

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