By David Russell, reporter at OptionMonster
More than 5,000 March 23 calls were purchased against open interest of just 1,008 contracts Thursday. Most of them went for 85 cents in a single large block, according to OptionMonster's real-time tracking systems.
These long calls lock in the price investors must pay for the digital-theater company's stock, and they have the potential to deliver major leverage if IMAX rips higher. If it doesn't, however, they will expire worthless.IMAX started climbing shortly after the options traded, ending the day up 4.75% to $21.84. The stock rallied more than tenfold between late 2008 and mid-2011 before losing almost two-thirds of its value. But it has been working its way higher since early in the fourth quarter. The company's last earnings report on Oct. 27 missed estimates, but investors focused on its aggressive growth plans. IMAX has remade itself by focusing on imaging technology rather than cumbersome equipment and has been rapidly expanding its footprint of cinemas in the United States and abroad. Overall option volume was 14 times greater than average in the name Thursday, with calls outnumbering puts by 23 to 1. Russell has no positions in IMAX.
Check Out Our Best Services for Investors
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Model portfolio
- Stocks trading below $10
- Intraday trade alerts