Upside Options Activity in American Capital

By Pete Najarian, co-founder of OptionMonster

American Capital (ACAS Quote) is starting to see some upside options activity as the stock digs its way out of the ashes.

Traders were focused on the June 5 options, in which more than 9,000 calls changed hands Friday for 15 cents and 20 cents, according to optionMONSTER's Heat Seeker monitoring system. The turnover dwarfed the average daily volume of just 409 calls at that strike and was more than double the open interest of under 4,000 contracts.

The stock closed Friday down 6.5% in the regular session and dropped another 1.3% in after-hours trading to an even $3. The shares have been making their way back up after being beaten down to under $1 in March, but are still only a fraction of their 52-week high of $33.56.

The investment firm, which specializes in private equity acquisitions, was upgraded on May 7 to "market perform" by Keefe Bruyette after the company reported quarterly earnings that missed analysts' estimates.