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Investor is staying in CenterPoint

Mike Yamamoto (mike.yamamoto@optionmonster.com)

A large investor is looking for CenterPoint to break out of its recent range in the next month.

optionMONSTER's Heat Seeker system shows that a trader sold 6,500 July 25 calls for the bid price of $0.10 and bought 6,500 August 26 calls for $0.20 yesterday. Volume was below previous open interest in the near-term contracts but above it the later strike, indicating that a long position was rolled forward.

The trader is closing the July contracts, which expire at the end of today's session, and is spending a net $0.10 to open a new position one month later at a strike that is $1 higher. The new long calls are looking for the stock to rally above $26 by mid-August but will expire worthless if shares remain below $26. (See our Education section)

CNP slipped 0.44 percent to $24.81 yesterday. The utility company rallied with bullish option activity in June but pulled back after its annual investor meeting and has been trading in an extremely tight range this month. CenterPoint is scheduled to release second-quarter results on Aug. 6.

Total option volume in CNP topped 14,500 yesterday, 6 times its full-session average for the last month. Only 169 of those contracts were puts, a reflection of the session's bullish sentiment.

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