By Mike Yamamoto, managing editor of OptionMonster
NEW YORK -- Traders are turning bullish on Tronox (TROX) before it reports earnings next week.
OptionMonster's tracking systems showed accelerated buying in the November 22.50 calls Wednesday as premiums climbed from $1.10 to $1.45. More than 2,900 contracts traded in volume above the strike's previous open interest of 2,329, indicating new activity.
Calls lock in the price where shares can be purchased no matter how far they might rise. Traders use them as a less expensive alternative to buying shares directly, getting the potential leverage provided by options while limiting the amount of money at risk if the stock heads south.Tronox's stock rose 3.04% to $21.71 Wednesday, breaking above its 50-day moving average and returning to its highs of last week. The titanium producer will release second-quarter results after the close on Aug. 7. Total option volume was 12 times greater than average in the session, with calls outnumbering puts by more than 6 to 1. Yamamoto has no positions in TROX.
Select the service that is right for you!COMPARE ALL SERVICES
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
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
- Upgrade/downgrade alerts
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
- Real Money + Doug Kass Plus 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV