Bulls Have Bright Outlook for SunTrust
By Pete Najarian, co-founder of OptionMonster
NEW YORK -- Thursday was a dark day for financials, but SunTrust (STI) got some sunshine.
OptionMonster's tracking systems lit up with buying in the October 30 calls, which are way out in time and in price. More than 5,000 were purchased, mostly for 10 cents, compared with previous open interest of just 200 contracts.
Those calls lock in the price of buying the stock in the next three months. Earnings come out Friday, so the traders are clearly looking beyond that event and are viewing the future through some rose-colored glasses.
If the stock rallies, the calls have the potential to appreciate significantly because they're so cheap. But if no move occurs, they will expire worthless. SunTrust fell 2.02% to $24.24 in Thursday's session. Total option volume was almost 11 times greater than average in the name. Najarian has no positions in STI.Select the service that is right for you!
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