By David Russell, reporter at OptionMonster
NEW YORK -- Goodyear Tire & Rubber (GT) was strong again Wednesday, and traders continue to position for upside later in the year.
OptionMonster's tracking systems detected the purchase of almost 8,500 October 18 calls against previous open interest of just 226 contracts. The largest block fetched 45 cents.
Owning calls locks in the price where shares can be purchased in the tire maker. They could provide major leverage in a rally because of their cheap entry price. For instance, a 30% move in the stock price would translate into a profit of more than 300%.The stock rose 2.48% to $15.29 Wednesday and is up 22% in the last month. It's been ripping higher as sentiment improves toward the automobile sector. Our systems have also turned up bullish activity in Ford on several occasions, so the space is definitely drawing attention. Total option volume was almost four times greater than average in the session. Calls outnumbered puts by more than 10 to 1. Russell has no positions in GT.