Bulls Want to Do Heavy Lifting With Terex

By David Russell, reporter at OptionMonster

NEW YORK -- Terex (TEX) has lit up with upside option activity again this week as the bulls remain highly constructive on the name.

OptionMonster's tracking systems detected buying in the August 18 calls for $1.80, with more than 2,500 changing hands against open interest of 208 contracts on Tuesday. About 3,100 August 19 calls were also purchased, mostly for $1.30.

Those calls lock in the price investors must pay for shares in the company, which produces cranes and heavy trucks. These options can generate significant leverage in the event of a rally but will lose all or most of their value if the stock doesn't move higher.

Terex's shares rose 8.07% to $18.62 on Tuesday. Earnings have beaten estimates for the last three quarters, and the stock doubled in value earlier this year before retreating in April and May.

The next financial-release date hasn't been announced yet, but last year's timing suggests that it will occur later this month. Tuesday's call buyers are apparently looking for the stock to run higher into the news.

Overall option volume was quadruple the daily average, with calls outnumbering puts by more than 4 to 1. Terex also drew bullish activity on June 27.

Russell has no positions in TEX

This commentary comes from an independent investor or market observer as part of TheStreet guest contributor program. The views expressed are those of the author and do not necessarily represent the views of TheStreet or its management.