Investors Swarm FirstEnergy as Strike Ends

OptionMonster co-founder Pete Najarian provides options picks Monday, Wednesday and Friday in TheStreet.com's Deep in the Money Calls newsletter.

Mike Yamamoto, managing editor of OptionMonster.

FirstEnergy(FE Quote) drew bullish options activity Friday after electrical workers ended a two-month strike against a Pennsylvania utility that is one of its subsidiaries.

Traders were focused on in-the-money options all the way out in 2010, where they were buying calls at the January 40 strike. More than 3,000 of those calls traded for $3.70 and $3.80 at six times the open interest, according to OptionMonster's tracking systems.

FirstEnergy closed Friday at $40.65, off 0.4% on the session. The stock has risen sharply since bouncing from around $37 on July 8 but is still only about half its 52-week high of $79.05 from a year ago.

For the calls purchased Friday to be profitable, FirstEnergy's stock would need to rise at least 7.5% by the time the contracts expire in mid-January 2010. The company is scheduled to report second-quarter earnings results on Aug. 3.

The writer has no holdings in the securities mentioned.