By Pete Najarian, co-founder of OptionMonster
NEW YORK -- Upside option activity hit Silver Wheaton (SLW) early on Friday, and traders racked up some fast money in the stock.
The Weekly 19 calls that expire at the end of this week were purchased early for 43 cents, according to OptionMonster's tracking systems. Almost 5,000 traded in the session vs. previous positioning of just 179 contracts, clearly showing that this is fresh buying.
Calls lock in the price where shares can be purchased, which can result in some nice leverage if the investor times the move correctly. That's exactly what happened in Friday's trade because those Weekly 19 calls more than doubled to over $1 by the afternoon.Silver Wheaton's stock rose 7.49% to close the session at $19.67 but has lost more than half its value since November amid a big selloff in gold and silver prices. More than 28,000 calls traded in the session, compared to fewer than 6,100 puts. Total option volume in the name on Friday was more than twice its daily average. Najarian owns SLW calls.