By David Russell, reporter at OptionMonster
NEW YORK -- Traders want to get a bang from gunpowder stock Olin (OLN).
optionMONSTER's tracking programs detected unusual activity in the maker of Winchester ammunition on Friday. The first big blocks hit in the October 25 calls, with investors paying 20 cents. More than 1,400 would trade against previous open interest of just 10 contracts.
Calls lock in the price where shares can be purchased, giving them potentially significant leverage to a rally. And that's exactly what happened, because OLN inched higher and those contracts almost doubled to 40 cents.Later in the session, buyers snapped up more than 2,000 November 25 calls, this time pushing premiums from 40 cents to 55 cents. Volume also surpassed previous open interest of 1,468 contracts, indicating that new money was put to work on the long side. OLN rose 0.13% to $23.10, and is trying to work its way higher from the bottom of its recent trading range. Total option volume was almost 10 times greater than average in the session, with calls outnumbering puts by a bullish 31-to-1 ratio. Russell has no positions in Olin.
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